If you were PM, what would you do?

[Tilter]

Can't be done without changing the consititution. Whipped votes are only possible because the government falls if it loses confidence measures. This ensures MPs have to toe the line if they don't want to be constantly fighting elections.

Gee--- if Jerry Fortin's rules were instituted the proposals would HAVE to make sense to Canada or there would be another election. Methinks that might make a big difference in the garbage that is always be proposed, junk that has NO chance of passing & wasting (as if that were possible) MPs time.

[jbg]

Gee--- if Jerry Fortin's rules were instituted the proposals would HAVE to make sense to Canada or there would be another election. Methinks that might make a big difference in the garbage that is always be proposed, junk that has NO chance of passing & wasting (as if that were possible) MPs time.

Do you mean Private Members' bills?

[Michael Hardner]

Ah yes, you mean we chop down the trees and send them to Asia to be processed, and we develop the raw oil, then send it to Asia to be processed?

Moooost impressive! Raw logs and bitumen! Those crafty Chinese will never compete with that!

New policies I didn't put in original post: No raw logs may be shipped from Canada for any reason. And all oil must be processed within our borders.

Ok. So you have unilaterally cut the size of lumber industry.

Next...

True. Except not with China.

Why not ?

The American government doesn't give a damn what is or is not in the best interests of America. The congressmen, senators and yes, the occupant of the White House only really care about the truck loads of money being poured over them by American corporations which are terrified the Chinese will simply seize their investments in China. As for the Canadian government, Harper used to have the right idea, but he's Mr. Pragmatist, and is going to do what Canadian corporations and the opposition want, which is bend his knee to China and look the other way at their trade violatins lest he offend them.

So the American and Canadian government are now covertly against their own people ?

This sounds like the language of the Occupy movement.

[Michael Hardner]

These sound good in principle. What are your thoughts on how this can be done? What do you see as lacking in the existing 'public forums for debate'?

The people are not attuned to the complexity of the questions we face. Look at this very thread. There are several people proposing changes "as PM" that they would have no power to enact. And MLW is a gathering of informed people.

A new public is required, something like a democratic focus group.

Does this mean you'd want to accelerate how much the PS already contracts work out?

I'm not sure how the PS contracts work out now. I want to make the parts of government that are necessary for service execution into efficient organizations, and for us to understand the organization as a whole.

Something else I might lean towards is having a national public employment service, a national 'temp agency' of sort, perhaps.

Yes, perhaps. I think they're going that way anyway.

[Michael Hardner]

It seems that many of the posters think that the PM is a absolute monarch and not contrained by the law, the bureacracy and the politics. The fact is PMs have very little power to effect real change and the most they can do introduce incremental changes to the status quo. The real power rests with people that can articulate a vision and get masses of people to buy into it. You dont have to hold a political office to do this.

I agree with you. It's surprising when you encounter a lack of understanding of the PM's powers on MLW, since this is arguably a more informed group. But that is part of our current problem - a misalignment with the public understanding of government and what their true nature is.

This also explains why we see a constant parade of "shining new hopes" getting elected, soon to be thrown down in the masses because they didn't meet ridiculous expectations.

Yes its actually funny.

Really the thread would be more appropriately titled "If you had absolute,unquestioned total control over every juridiction and aspect of Canada and definition of.Regardless of concern from its citizens/voters,etc,etc well you get the idea.

If anyone had this kind of power the corruption would leed to unimanginable devastation!

WWWTT

It almost seems that people don't want democracy sometimes. They want a 'big man' to rise up and take care of everything.

[Scotty]

Ok. So you have unilaterally cut the size of lumber industry.

The government cut the size of the pulp and paper industry when it agreed to allow raw logs to be exported. There are far more jobs, and more profit in processing the logs here. Yet the more we allow raw logs to be exported the more the industry clamours for more. Why not? They hold timber licenses and they can simply cut down the logs and ship them to China or Japan for healthy profits. But there are better jobs and more economic activity to be had in processing them here. Other industrialized nations do so. Why can't we? I'd enter into agreements with other lumber producing nations, for it's in their interests as well to not ship raw logs to China and Japan.

Same goes for oil, which you didn't comment on.

Why not ?

Because for decades now China has demonstrated its complete contempt for the rule of law. It flouts international trade laws at every opportunity and engages in all manner of often brazen violations and predatory activities. An example would be the fact that some government departments have still not fully assessed the damage from the Chinese government's hacking attack when they were looking to buy out Canada Potash. They simply hacked into government and industry computers to obtain inside information. This is something the Chinese do routinely, on behalf of their state owned enterprises. Something you would have an inkling of if you'd bothered to read my previous cite.

So the American and Canadian government are now covertly against their own people ?

No, they are doing it overtly. The American government, in particular, is very nearly completely corrupt. Its paymasters are the corporations which donate hundreds of millions to their campaigns, and promise politicians million dollar jobs if they are booted from office.

This sounds like the language of the Occupy movement.

They aren't entirely wrong.

Edited January 15, 2012 by Scotty

[Michael Hardner]

The government cut the size of the pulp and paper industry when it agreed to allow raw logs to be exported. There are far more jobs, and more profit in processing the logs here. Yet the more we allow raw logs to be exported the more the industry clamours for more. Why not? They hold timber licenses and they can simply cut down the logs and ship them to China or Japan for healthy profits. But there are better jobs and more economic activity to be had in processing them here. Other industrialized nations do so. Why can't we? I'd enter into agreements with other lumber producing nations, for it's in their interests as well to not ship raw logs to China and Japan.

Same goes for oil, which you didn't comment on.

No, I'll leave this argument as it is.

According to economic orthodoxy, freer trade provides an overall benefit. I'm not an economist, though, so I can't defend the prevailing thinking beyond the basic points.

This is something the Chinese do routinely, on behalf of their state owned enterprises. Something you would have an inkling of if you'd bothered to read my previous cite.

Well, I do have an inkling of it which is why I didn't read your cite.

But every country violates their trade agreements, and I have heard this said about the US and Canada. What makes China and Canada's history on this so bad that we should shut them out ? Do you have something objective that evaluates nations based on their trading behavior and the net costs/benefits ? If so, I'd like to see it.

No, they are doing it overtly. The American government, in particular, is very nearly completely corrupt. It's paymasters are the corporations which donate hundreds of millions to their campaigns, and promise politicians million dollar jobs if they are booted from office.

They aren't entirely wrong.

Ok, well I don't subscribe to the extreme-negative-left viewpoint. I tend to be more optimistic.

If globalized trade offers an overall net benefit, we need to set up a better process to look at complaints, and to help the economic loses with transitions.

[dre]

No, I'll leave this argument as it is.

According to economic orthodoxy, freer trade provides an overall benefit. I'm not an economist, though, so I can't defend the prevailing thinking beyond the basic points.

Putting aside both economic theory, and the fact that economists in general know so little about economics, dont agree on anything, and almost never get anything right... I disagree with your premise.

Take a look at the difference between the forest industry in sweden VS the industry here in Canada. They have invested in all the offshoots. They manufacture all of the equipment required, and they have invested in a large processing industry. Almost half the saws used by loggers in Canada are swedish made Husky, or Jonesered. Despite having a tiny percentage of the worlds standing timber, the swedish industry in size is second only to Canadas and only a little bit smaller despite the fact they have way less timber.

The Canadian industry is an example of how we can get the very least ammount of employment and profit per acre of standing timber, and your claim that theres some kind of consensus amongst economists that we are doing the right thing here is highly dubious... more a religious belief than anything else.

As for free trade in more general terms pretending this is settled economics is dishonest. Most of the industrialized nations that have embraced free trade are in big trouble, and what you call "free trade" is REALLY debt based consumption in the west. Wages in most of these countries have been stagnant since they began to surrender production, and most of them are either in, or approaching some kind of debt crisis.

Hardcore free traders are every bit as clueless about economics as hard core protectionists.

Edited January 15, 2012 by dre

[Michael Hardner]

Putting aside both economic theory, and the fact that economists in general know so little about economics, dont agree on anything, and almost never get anything right... I disagree with your premise.

I have a hard time when we reject outright an entire body of knowledge. Maybe there are times when we can do this, but unless I have some knowledge in the area I'm reluctant to do that.

Take a look at the difference between the forest industry in sweden VS the industry here in Canada. They have invested in all the offshoots. They manufacture all of the equipment required, and they have invested in a large processing industry. Almost half the saws used by loggers in Canada are swedish made Husky, or Jonesered. Despite having a tiny percentage of the worlds standing timber, the swedish industry in size is second only to Canadas and only a little bit smaller despite the fact they have way less timber.

Is Sweden more isolationist ? From what I've read, they seem to have much close cooperation between government, labour and business - which gives them an advantage in planning. It could also mean that they make a better attempt at isolationism, but they can't overcome natural advantages that other countries have.

The Canadian industry is an example of how we can get the very least ammount of employment and profit per acre of standing timber, and your claim that theres some kind of consensus amongst economists that we are doing the right thing here is highly dubious... more a religious belief than anything else.

I don't know what is germane about the timber example - are they more productive, is that it ?

As for Economists belief in Free Trade, it's hard to get Friedman and Krugman to agree but

"Protectionism is frequently criticized by mainstream economists as harming the people it is meant to help. Most mainstream economists instead support free trade.[1][4] Economic theory, under the principle of comparative advantage, shows that the gains from free trade outweigh any losses as free trade creates more jobs than it destroys because it allows countries to specialize in the production of goods and services in which they have a comparative advantage.[13] Protectionism results in deadweight loss; this loss to overall welfare gives no-one any benefit, unlike in a free market, where there is no such total loss. According to economist Stephen P. Magee, the benefits of free trade outweigh the losses by as much as 100 to 1.[14]Most economists, including Nobel prize winners Milton Friedman and Paul Krugman, believe that free trade helps workers in developing countries, even though they are not subject to the stringent health and labour standards of developed countries."

As for free trade in more general terms pretending this is settled economists is dishonest. Most of the industrialized nations that have embraced free trade are in big trouble, and what you call "free trade" is REALLY debt based consumption in the west. Wages in most of these countries have been stagnant since they began to surrender production, and most of them are either in, or approaching some kind of debt crisis.

A good discussion, but maybe it deserves its own thread.

There is definitely an economic advantage to freer trade. What is happening with debt, wages and so forth needs to be looked at.

Hardcore free traders are every bit as clueless about economics as hard core protectionists.

There are other policies - not just economic policies - that have had an effect since globalization became a trend. I'm not sure that the effects you're talking about are caused by freer trade, but part of a larger shift towards consolidating power and wealth.

[William Ashley]

Use legislation and carte blanche to improve peoples lives - but I'm guessing you mean what type of policies would I go with

THE SHORT

DEBT ELIMINTATED IN 15 YEARS - NO MORE FEDERAL TAXES (ONLY DIRECT LEVEE TO ELIMINATE POVERTY)

0% UNEMPLOYMENT OF WILLING

FREE EDUCATION AND EDUCATIONAL CONTENT, WITH GRADUALLY REDUCING EDUCATIONAL COSTS

ENFRANCHISEMENT OF THE PEOPLE IN THE SYSTEM WITH DIRECT INPUT AND VOTING AS PART OF THE SYSTEM, COOP/PUBLIC CROWN CORPS

MORE INFORMATION SECURITY AND A SAFER CANADA

LESS BEAUROCRACY AND REDTAPE

ONLY THE SERVICES PEOPLE NEED OR WANT.

INSURE HUMAN RIGHTS BY OVERRULING ACTS LIKE THE MENTAL HEALTH ACT WHICH VIOLATE CANADIANS CHARTER RIGHTS BY ALLOWING THE VIOLATION OF PERSONAL LIBERTY WITHOUT CONTEXT OT FUNDAMENTAL JUSTICE OR FREEDOM OF CONSCIENCE.

THE LONG

ECONOMIC POLICY: Removal of Debt in 15 Year by Eliminating Income Tax, having corporations pay the debt interest, requring an equal minimum payment on share of per capita income for

citizens until per capita debt share is paid off by the individual, incentive programs for debt repayment such as a bond like system of return on savings to the Federal Government for payment - i.e.

renegotiate debt for lower interest rates. Pay for government costs with printing for any funds not raised voluntarily from the public. Institute cooperative crown corps for Old Age Security,and National Health Insuranc. Institute a National Reserve for Strategic Goods/ and a national market. Enforce NAFTA's environmental damage clauses, implement a 0 emissions industrial development program.

Institute an Environmental Cleanup Surcharge for Import and Producers. Lease non essential transport facilities and roadways. Create Merchant Marine as a means of building the Navy.

Institute a Federal Works program. Create Work Camps as pennentaries with workshare and pay.

Restructuring - the Federal Government would be restructured to Operate as a Public Bank. Since taxes would no longer be filed or collected, instead every one in Canada would be required to

have a Public Bank Account tied into their SIN# acceessable with their ID. Everyone in Canada including visitors would need to get a "canadian SIN passport" which would also act as a bank card

visitors would need to have a minimum balance which would be redeemed on exit if they opted. There would be a fee for the card for foreign visitors, but this fee would cover up to a month of

normal use in terms of transactions, it would act like a credit/debit card, and would work on the interact/mastercard/visa card system. Businesses would log sales and other reporting requirements,

and dispere payroll through the system. All federal departments would be roled into the Bank system from the Treasury - eg. Infrastructure, Banking, Mint, CRA, Corporations Canada, Health Canada etc.. and programs such as Old Age Security and Health Insurance would be "branded" as opt in services - while poverty removal programs would be based on actual income and assets. The bank

would operate at cost on a NFP basis with any revenues after costs returned to the citizens on a per capita basis - or if the debt still existed direct to debt paydown. Private Bank accounts would be tied to the public account. and funds would be able to seamlessly be transfered from the public account to private accounts (with private banks) - Aside from the Bank, the government would Operate a Chancellory - headed by the Governor General - - this stream would be incharge of heritage and education and the national councils such as Arts and Sciences. - and would bethe means of the

grand advisory council and citizens assembly)

These would be lumped in as "services" that are optional. Individuals would be able to propose programs and departments would be able to fundraise and sendout tenders via the bank system.

The Interior would be based on parliament, the courts, emergency services (federal police, military, militia, coast gaurd and the like) these would be deemed the "essential public safety services"

The External would deal the Foreign Affairs and Trade (more or less the state department) groups like CIDA, missions etc.. - with a NEUTRAL policy framework the idea would be primary information delivery, processing the foreign passport bank cards, and creatingcontacts for clarity of communication. Private programs would be initiated foraid while CIDA would operate under a business and ownership model.

Bonds would be eliminated wholey and Print of new monies would be used to raise revenue.

Defence Policy: set a policy of self sustenance for national defence provide for the crownlands to be utilized by the CF without royalty payment requirement, invest billions into defence infrastructure to create a base for production of wholely Canadain defence products rather than importing from the US. Increase training programs for CF so they are capable of gunsmithing, and equipment manufacture. implement site training and construction and upkeep of federal infrastructure as a role of

the CF. Institute Private Militias. Focus on Technology such as missles and railguns and electronic systems, A MODULAR militar - focus on modularity. -- Put a fitness facility every highschool that

is publically accessible with full spectrum equipment. Support mega-"Gymnasiums" in major population centers with free access to the citizens. (payment for use for non citizens)

Canada would be nuclear armed - with Nuetron and Plutonium systems and delivery capabilities. merchant marine to supliment the navy and provide hulls for ships.

CLEANUP: 1 ID supported with biometrics - THE PASSPORT. all ID's rolled into passport (would act as sin card and every other ID requirement by containing the data on a part of the passport

listing licensing etc.. as well electronically stored.

LEGAL: replace Criminal Code with Public Safety Code and Treasury Code - with a focus on public safety and economic crmes - leave the provinces to deal with civil issues (any federal laws on

crime should be of the indictable type and cary what would be a 2 year sentence minimum) Focus on restitution, and rehabilitation, institute death penalty as an option for the accused rather than

sentencing of other sorts only the accused may optin on death (required to preauthorize, or a 3 month review process required), create a National Supplimentary Police net, institute public monitoring

system to monitor movement of individuals and vehicles (via rfid like tech) can lock into persons of interest but codes are scured so only those on the inside can track but alarms would be set. Biometics could be used to identify people -while a sub dermal chip or in the vehicle, could be used to transmit the ID token - areas with periodic verification of biometric data. Sever penalty for attempting to circumvent the

tracking system. This makes things such as speeding more easy to identify - but speed limit would be removed on roads and reckless endangerment would be gauged on road conditions with increased personal liabilities if at fault foraccidents based on speed.

Citizens assembly with every citizen having1 vote, aided by technology - vote proxying would be allowed. It would serve as a means of proposition, review for redress and feedback)

Supplimentary Advisory Council (Grand Council - as a means of assembling those who volunteer for council to have --- +1 likes from Parliament, and the Citizens council so that prominent advisors

would be identified setting thresholds for identification for each catagory)

A National Intranet would be implemented that is secure, it would utilize levels of security that is "hardware secured acess at high level (data input allowance), corporate accounts (where corporations,

provide data to be updated to corporations canada), individual accounts where citizens have specific data and qualifications input into their citizens file (and citizensopt to make private or public), and

wimax type tech that would be rolled out accross Canada for "delivery" only. Individuals would be able to "browse information but would not be able to input a change to the system. The government

would provide educational content and service delivery. Citizens could at service Canada locations alter their data physically in secure facilities. A "mirror and link" to the unsecure "mirror" would be able to add supplimentary data utilizing the "normal" internet". To use this service individuals would log in with a biometric system such as webcam, and their physical location would need to be "allowed" by notifying service canada. This system would provide free internet to everyone for informational purposes - with the government utilizing its grants programs to aquire content and take donations of content for addition to the Online National Library - an education council would be mandate to create "master programs for educational areas such as math science history etc" Software would also be

made available to download through the public net. Video phone service would also be made available so that individuals would have a "tone broadcast" via the phone to enable their National Intranet

to lock in on to links all that is needed is a microphone to recod the tone -- this would be interfaced with smart phones, and all smartphones sold in canada would have to be standardized to access the national net which would broadcast on specific frequnecies so that only Canadian Phones would be able to access the National Intranet.

ENVIRONMENT: An environmental cleanup surcharge would be levied against importers and producers based on the rating of the goods interms of damage during production,and use. This fund would

service environment Canada that would service as an EPA.

Magistrates courts would serve as a means of out of court settlement. Insure public access to courts at no cost - implement "criminals support payment" that is anyone convicted pays a small service charge to support federal court costs, magistrates would be publically elected

Edited January 15, 2012 by William Ashley

[Michael Hardner]

Use legislation and carte blanche to improve peoples lives - but I'm guessing you mean what type of policies would I go with

Did you write this ?

I think we already discussed above limits to the PM's powers. I didn't read too much of this but it seems to overreach in that area.

[William Ashley]

Did you write this ?

I think we already discussed above limits to the PM's powers. I didn't read too much of this but it seems to overreach in that area.

The PM assembles a cabinet, the cabinet proposes government legislation to parliament there really ain't more to it than that although the GG can deliver letters patents to parliament. None the less the PM is the first minister.

This is what I would set to administer. The ability would of course be set by the laws parliament passes, but that is the gist.

PM is a guy who gives advice thats it. De facto a lot is appointments, but de jure they are a political advisor to the monarch. The Regal agent is the executive and limited only by parliament and popular redress actions. The rule by law and have access to rule by force as exists within their powers be they reserve, statute or otherwise.

The PM and GIC just gives insight into how to utilize those powers as delegated or distributed. Hence Ministries and Prime Minister.

I am a benevolent individual - I think benevolence wins the future and good for all.

Edited January 15, 2012 by William Ashley

[Jerry J. Fortin]

The PM can lead, that is all he can do. The rest is done by majority vote. Knowing this should we not simply seek leadership?

[dre]

I have a hard time when we reject outright an entire body of knowledge. Maybe there are times when we can do this, but unless I have some knowledge in the area I'm reluctant to do that.

Is Sweden more isolationist ? From what I've read, they seem to have much close cooperation between government, labour and business - which gives them an advantage in planning. It could also mean that they make a better attempt at isolationism, but they can't overcome natural advantages that other countries have.

I don't know what is germane about the timber example - are they more productive, is that it ?

As for Economists belief in Free Trade, it's hard to get Friedman and Krugman to agree but

"Protectionism is frequently criticized by mainstream economists as harming the people it is meant to help. Most mainstream economists instead support free trade.[1][4] Economic theory, under the principle of comparative advantage, shows that the gains from free trade outweigh any losses as free trade creates more jobs than it destroys because it allows countries to specialize in the production of goods and services in which they have a comparative advantage.[13] Protectionism results in deadweight loss; this loss to overall welfare gives no-one any benefit, unlike in a free market, where there is no such total loss. According to economist Stephen P. Magee, the benefits of free trade outweigh the losses by as much as 100 to 1.[14]Most economists, including Nobel prize winners Milton Friedman and Paul Krugman, believe that free trade helps workers in developing countries, even though they are not subject to the stringent health and labour standards of developed countries."

A good discussion, but maybe it deserves its own thread.

There is definitely an economic advantage to freer trade. What is happening with debt, wages and so forth needs to be looked at.

There are other policies - not just economic policies - that have had an effect since globalization became a trend. I'm not sure that the effects you're talking about are caused by freer trade, but part of a larger shift towards consolidating power and wealth.

There is definitely an economic advantage to freer trade.

No you would have to look at every situation on a case by case basis to decide that. If you try to apply an overarching theory to everything youre guaranteed to get it wrong.

Back to the example of China. Whats really happening in China is that the government is manipulating their currency to grow their exports. Their dollar would be about 2.5 times its current value if they did not do this. This results in a lot of countries running perpetual trade defecits with China, and a lot of firms moving production there. China then dumps all this money back into the bond market so that we can continue to fund consumption with debt.

Theres a number of problems with this approach. If China allows its currency to float, and most people believe it will eventually have to, then we are going to see a dramatic increase in the cost of goods very quickly (inflation). If we continue to surrender productive capacity and China doesnt allow their currency to float many western countries will fail under the increasing weight of their current accounts defecits.

For the west "Free trade" simply means more products and services are being exported, than the number of those being importered. This only works as long as countries like China, Saudi Arabia, and Japan keep buying bonds, so that we can keep borrowing money to buy their products.

This is "good" for some countries and "bad" for others. You can picture pretty easily what would happen if the globalists were able to achieve their ultimate goal... the total commoditisation of labor. The countries that will win will be the ones with either a. dirt cheap labor, or b. lots of resources to export to markets with dirt cheap labor. And we are seeing this already... thats why Canada has faired much bettter than many other western countries. Its easy to cut down trees and export oil.

So it really is a mixed bag. And despite claims that what is known as "free trade" is some kind of permanent new paradigm, its not. Its a temporary trade imbalance that WILL be corrected. THe currency values in countries that run large trade surpluses will increase, and the currency values of countries that run perpetual trade defecits will decrease, and those countries will no longer be able to afford to import all these products.

If you doubt that basic premise of what Im saying, which is that no entity can run a negative balance of trade for long... then try it with your own household finances! Try consuming significantly more than you produce over the next ten years and report back the results. They will be virtually the same as what you are going to see globally. For the first few years of your experiment you household will benefit from all that debt based consumption. Youll have a big screen TV in every room, a fancy house, a few new cars etc! But after doing this for a few years, your credit rating will be downgraded (like most western countries operating this way have been), and will have to choose between either bankruptcy, or taking steps to fix your balance of trade, and produce more than you can consume. You are now forced to pay the real cost of all that consumption plus interest.

Right now its easy for economists to claim a "net benefit" because we are still early on in that cycle. This whole rosy picture is the result of evaulating things based on one narrow snapshot in time. This issue is nowhere near as simple as youre making it out to be.

Edited January 15, 2012 by dre

[TimG]

Do you not find the concept of free voting as appealing at all? Should not the free vote of a citizens be determined to be a fundamental entitlement of our citizenship?

Academically I think free votes are good. Then I look at the US example and recoil in horror at the influence held by lobby groups precisely because they can purchase (via large campaign donations) the votes of individual congress people. My feeling is that unless I am presented with a viable solution to this problem I would prefer to stick with the "devil i know".

[TimG]

Putting aside both economic theory, and the fact that economists in general know so little about economics, dont agree on anything, and almost never get anything right... I disagree with your premise.

Sounds just like climate science! It is interesting to see that you are perfectly willing to dismiss the work of scientists when it suits your ideological inclinations.

That said: no country has every gotten rich with protectionism. The only examples of protectionist countries that succeed are those that depend one way free trade. You can lambast the receiving countries for allowing free riders but these examples do not support your case that free trade leaves people worse off. I would argue the problem is one sided free trade where one partner is allowed to get away with protectionist policies.

As for free trade in more general terms pretending this is settled economics is dishonest. Most of the industrialized nations that have embraced free trade are in big trouble, and what you call "free trade" is REALLY debt based consumption in the west. Wages in most of these countries have been stagnant since they began to surrender production, and most of them are either in, or approaching some kind of debt crisis.

I think you are trying to connect unrelated concepts. The deficit problems in western countries are the result of government services which are far richer than any in developimg countries. These costs are being exacerbated as growth slows down and the population ages. Edited January 15, 2012 by TimG

[dre]

Sounds just like climate science! It is interesting to see that you are perfectly willing to dismiss the work of scientists when it suits your ideological inclinations.

That said: no country has every gotten rich with protectionism. The only examples of protectionist countries that succeed are those that depend one way free trade. You can lambast the receiving countries for allowing free riders but these examples do not support your case that free trade leaves people worse off. I would argue the problem is one sided free trade where one partner is allowed to get away with protectionist policies.

I think you are trying to connect unrelated concepts. The deficit problems in western countries are the result of government services which are far richer than any in developed countries. These costs are being exacerbated as growth slows down and the population ages.

I think you are trying to connect unrelated concepts. The deficit problems in western countries are the result of government services which are far richer than any in developed countries. These costs are being exacerbated as growth slows down and the population ages.

These concepts are not unrelated at all. Trade defecits are inextricably linked to current account defecits, and they are also linked to savings and debt. The social spending you mention can only happen if countries can sell bonds, and the bond market is being propped up by countries that run large trade suprluses (pacific rim countries, oil exporters, etc). If countries like China were not running huge perpetual trade surpluses with the US, they would not be able to prop up the bond market, and the governments ability to defecit spend social programs would be greatly reduced.

Trade defecits also contribute directly to the business cycle. This is where a lot of the money that was used to inflate the US realestate market came from. Savings rates in these countries (pacific rim and oil exporters) were as high as 40%, and that capital needed somewhere to go. It re-entered the US economy using vehicles such as asset backed securities.

In 2005, Ben Bernanke addressed the implications of the United States's high and rising current account deficit, resulting from U.S. investment exceeding its savings, or imports exceeding exports.[174] Between 1996 and 2004, the U.S. current account deficit increased by $650 billion, from 1.5% to 5.8% of GDP. The U.S. attracted a great deal of foreign investment, mainly from the emerging economies in Asia and oil-exporting nations. The balance of payments identity requires that a country (such as the U.S.) running a current account deficit also have a capital account (investment) surplus of the same amount. Foreign investors had these funds to lend, either because they had very high personal savings rates (as high as 40% in China), or because of high oil prices. Bernanke referred to this as a "saving glut"[150] that may have pushed capital into the United States, a view differing from that of some other economists, who view such capital as having been pulled into the U.S. by its high consumption levels. In other words, a nation cannot consume more than its income unless it sells assets to foreigners, or foreigners are willing to lend to it. Alternatively, if a nation wishes to increase domestic investment in plant and equipment, it will also increase its level of imports to maintain balance if it has a floating exchange rate.

Regardless of the push or pull view, a "flood" of funds (capital or liquidity) reached the U.S. financial market. Foreign governments supplied funds by purchasing U.S. Treasury bonds and thus avoided much of the direct impact of the crisis. American households, on the other hand, used funds borrowed from foreigners to finance consumption or to bid up the prices of housing and financial assets. Financial institutions invested foreign funds in mortgage-backed securities. American housing and financial assets dramatically declined in value after the housing bubble burst.[175][176]

Trade defecits, current accounts defecits, and national debt are not isolated concepts. Trade defecits in the short term result in overly favorable credit conditions, as the nations running the trade suprluses dump all those dollars back into the bond market, to prop up the currency of nations running the defecits so that they will be able to keep buying more goods. These overly favorable credit conditions serve to further reduce savings rates, and they cause asset bubbles.

You can only drink so much before you wind up with a hangover.

The portion I bolded above is that part free trade absolutists would like to ignore.

In other words, a nation cannot consume more than its income unless it sells assets to foreigners, or foreigners are willing to lend to it.

In other words... the "benefits" being enjoyed by the west can ONLY be realized by either selling domestic assets to foreigners, or perpetually borrowing money. Anyone that thinks the gigantic positive flow of goods and services from east to west (which is really what westerners think of as "globalism") can go on for long are ignoring fundamental economics. Eventually these people are going to be forced to rebuild their savings, and when they do, all this debt funded consumption, and debt funded governance is going to dry up, and its going to be a disaster not only for us, but the countries like China that have invested in massive production capacity geared towards export to western consumers.

Edited January 15, 2012 by dre

[TimG]

The social spending you mention can only happen if countries can sell bonds, and the bond market is being propped up by countries that run large trade suprluses (pacific rim countries, oil exporters, etc). If countries like China were not running huge perpetual trade surpluses with the US, they would not be able to prop up the bond market, and the governments ability to defecit spend social programs would be greatly reduced.

Your description of the symptoms is correct but you are still wrong on the diagnosis. The problem here starts and ends with governments that insist on borrowing money to meet spending committments. The puts them in a situation where they must tolerate one sided free trade because they need to sell the bonds. The solution is not an end to free trade but an end to perpetual deficit financing by governments. Edited January 15, 2012 by TimG

[dre]

Your description of the symptoms is correct but you are still wrong on the diagnosis. The problem here starts and ends with governments that insist on borrowing money to meet spending committments. The puts them in a situation where they must tolerate one sided free trade because they need to sell the bonds. The solution is not an end to free trade but an end to perpetual deficit financing by governments.

Thats simply not true, because the built in mechanism in the market to stop overspending is your credit card gets cancelled. But in this case we are getting "credit" from the same folks we run huge trade defecits with, and the whole reason they are extending that credit to us is so that we can keep maintaining that trade inbalance with debt funded consumption, and keep buying their stuff.

Of COURSE governments will defecit spending under these conditions, for essentially the same reason that consumers do. Its really easy to do, and you get to live large in the present at the expense of the future (when these politicians will no longer be in office to have to fix the problems they make).

At the end of the day we will crash headlong into this...

In other words, a nation cannot consume more than its income unless it sells assets to foreigners, or foreigners are willing to lend to it

We have taken this short term trade imbalance, wrapped slogans such as "global economy", and "free trade" around it, and pretended its a whole new global recipe for prosperity. But the reality is that once the market corrects itself, and westerners and western governments scramble to rebuild their savings, all that debt based consumption is going to dry up and most of that trade is going to disappear, because its only possible in the face of either the surrendering of assets or the perpetual accumulation of debt.

The solution is not an end to free trade but an end to perpetual deficit financing by governments.

Those things are one in the same. Debt funded consumption is the only reason all this trade is happening between the east and west in the first place. If our credit dries up so will most of that trade, which is of course why these countries are so desperately trying to prop up our currency, push down their own currency, and keep us borrowing and spending.

Edited January 15, 2012 by dre

[dre]

Im going to bookmark this thread, because EXACTLY what I described is whats going to happen.

The longer the west maintains a huge trade defecits with the east under the mantra of "free trade" and "all trade is good!", the deeper in debt we are going to get. We are going to see their currencies increase dramatically in comparison to ours (we already would be seeing that if we were really in a "free market". The party will be over and the west will have no choice but to start rebuilding its savings. Debt funded consumption will dry up, domestic production will return, and most of this "free trade" will stop. This will cause economic meltdowns in countries like China that rely on foreign debt funded consumption for most of its exports.

It will get ugly not only in the west but in the east as well, and the recession we had in 2007/2008 will look like a tiny blip in the market compared to whats coming. The fundamentals of the "global economy" are not sound, they are brutal and this whole thing is going to blow up in our faces. We will continue to try to paper over structural economic problems and imbalances with massive monetary expansion, bailouts, borrowing, and printing, but in the end it will just make the hangover worse.

Edited January 15, 2012 by dre

[Scotty]

According to economic orthodoxy, freer trade provides an overall benefit. I'm not an economist, though, so I can't defend the prevailing thinking beyond the basic points.

I'm not arguing against free trade. Yes, the theory of free trade is sound. The application, however, can cause difficulties. In the case of China, though, you do not have free trade except in one direction. You have a predatory nation flooding our economy with good which are far too cheap because the way they manipulate their currency, and violating every rule of international trade to ensure that as much manufacturing as possible takes place in their country. That includes making life as difficult as possible for manufacturers in other nations by stealing trade secrets and undermining their markets with below-cost goods.

Well, I do have an inkling of it which is why I didn't read your cite.

What does an 'inkling' mean? Does it mean you're aware of the degree of trade law violations the Chinese government is guilty of?

But every country violates their trade agreements,

No, every nation does NOT violate their trade agreements. And when they do and that's found to be the case, they change the policy. China does not do this. China simply slightly alters their illegal behaviour and subsidies and then continues on.

Ok, well I don't subscribe to the extreme-negative-left viewpoint. I tend to be more optimistic.

If you think it's only the view of the extreme left that big money has perverted the US political system then you're awfully out of touch.

[Jerry J. Fortin]

Academically I think free votes are good. Then I look at the US example and recoil in horror at the influence held by lobby groups precisely because they can purchase (via large campaign donations) the votes of individual congress people. My feeling is that unless I am presented with a viable solution to this problem I would prefer to stick with the "devil i know".

The elusive viable solution problem! I will bite that problem with dialogue. The answer is quite literally at our fingertips! A dialogue of ideas and concepts, new ways to look at things and new ways of understanding things. If all you want is an alternative to the rule of partisan politics, then look no further than this; Have the Prime Minister stand in the House of Commons and ask that all members join the Government of Canada as Cabinet Ministers. I do not believe there is any legal impediment to this political strategy. Once accepted as Cabinet Ministers, a one representative one vote rule is applied, party whips are not required, there being no fixed opposition to the government. Opposition is created during the debate and voting process by means of free votes. Why this strategy? In two words, High Treason. Better to be like Caeser's wife than be accused in that manner. The cost to the would be traitor simply too high to compensate for monetarily. The point of the exercise being known as a means of preventing corruption of officials. Taking this approach provides protection for the public from the hands of corrupt officials. It allows for zero wiggle room for the slime who would seek to benefit at public expense. All that from simply devising a way to promote free voting in the Commons.

[jbg]

Im going to bookmark this thread, because EXACTLY what I described is whats going to happen.

The longer the west maintains a huge trade defecits with the east under the mantra of "free trade" and "all trade is good!", the deeper in debt we are going to get. We are going to see their currencies increase dramatically in comparison to ours (we already would be seeing that if we were really in a "free market". The party will be over and the west will have no choice but to start rebuilding its savings. Debt funded consumption will dry up, domestic production will return, and most of this "free trade" will stop. This will cause economic meltdowns in countries like China that rely on foreign debt funded consumption for most of its exports.

It will get ugly not only in the west but in the east as well, and the recession we had in 2007/2008 will look like a tiny blip in the market compared to whats coming. The fundamentals of the "global economy" are not sound, they are brutal and this whole thing is going to blow up in our faces. We will continue to try to paper over structural economic problems and imbalances with massive monetary expansion, bailouts, borrowing, and printing, but in the end it will just make the hangover worse.

Dre, this may be one of the few times we're in agreement.

And I'll further add that free trade is not free when our "competitors" in China and Pakistan use what amounts to slave labor and have no environmental laws.

[Michael Hardner]

Im going to bookmark this thread, because EXACTLY what I described is whats going to happen.

The longer the west maintains a huge trade defecits with the east under the mantra of "free trade" and "all trade is good!", the deeper in debt we are going to get.

I think TimG has more knowledge about trade vs debt, so I'll leave it to him but I don't accept that these things are necessarily related.

[Michael Hardner]

What does an 'inkling' mean? Does it mean you're aware of the degree of trade law violations the Chinese government is guilty of?

No, but I did ask for an objective summation of complaints, i.e. another source.

No, every nation does NOT violate their trade agreements. And when they do and that's found to be the case, they change the policy. China does not do this. China simply slightly alters their illegal behaviour and subsidies and then continues on.

But if Canada and the US have problems it shouldn't be a surprise when Canada and China have problems.

If you think it's only the view of the extreme left that big money has perverted the US political system then you're awfully out of touch.

Ok. Do you have a counter example ? Who on the right is complaining about 'big money' or 'corporate influence' for example ?