Monday, March 30, 2009
Sunday, March 29, 2009
How Harper Gov't Pushed Financial Deregulation Here, Abroad
Way cleared for US mortgage firms and easy credit, insured by Canadian taxpayers.
By Ellen Gould
Published: October 8, 2008
Listen to Stephen Harper and you might think Canada plays to our national stereotype when it comes to the world of finance. We might be boring but at least we don't stand for the risky policies adopted by our American cousins.
In response to a pessimistic Merrill Lynch report on Canada's housing market, for example, Harper said "We don't have the same situation here with the mortgages as was the case in the U.S. with the subprime mortgages there. So, therefore, I think that our market is in a much stronger position."
There are differences in the Canadian and U.S. housing markets, differences that can generate sharply contrasting points of view on whether Canada will experience a housing meltdown comparable to the one in the U.S.
The thing is, the Harper government is responsible for pushing the envelope on deregulation both domestically and internationally despite cautionary events in the U.S. clearly indicating what could go wrong.
Promoting mortgage 'innovation'
In his first budget as Harper's finance minister, Jim Flaherty invited "new players" -- that is, U.S financial corporations -- into Canada's mortgage insurance market and doubled the amount of government money available to back up private insurers from $100 billion to $200 billion. Flaherty's 2006 budget states that "These changes will result in greater choice and innovation in the market for mortgage insurance, benefiting consumers and promoting home ownership."
New York Times columnist Paul Krugman has observed that "financial innovation" are two words that should henceforth strike terror into the hearts of investors. With the entrance of new private mortgage insurers into Canada after the Flaherty budget, Canada saw a dramatic weakening in the standards for mortgage insurance. This enabled Canadians to get into homes they otherwise couldn't have -- and in many cases shouldn't have. It also kept house prices rising. In fact, Canadian median house prices peaked this year at levels higher than median prices at the top of the market in the U.S.
In November 2006, Canada Mortgage and Housing Corporation responded to the competition from private insurers by starting to insure no-down-payment, interest only, and 40-year amortization mortgages. A CMHC spokesperson was quoted in the National Post as saying: "We're the third guys coming up to the plate with these products. AIG has done it, GE has done it. We're just doing something that's in the marketplace."
Competition from U.S.-based mortgage insurers meant risky products rapidly took over the Canadian mortgage sector. Forty percent of new mortgages approved in 2007 were amortized over 40 years, and in overheated markets like Alberta's, the percentage was even higher. By 2007, there was clear evidence from the U.S. on the hazards of loose mortgage standards, but the Harper government did not step in to tighten regulations here.
If the Tories had really wanted to make houses more affordable for low income Canadians, one thing they could have done was to reinstate CMHC's social housing programs. Innovative mortgage products do not do cash-strapped families any favours. Rather than being considered a break for low income people, mortgages with lengthy amortizations should be regarded as an extremely expensive way to buy a home. An analysis in the Toronto Star pointed out: "A 40-year mortgage [on a $350,000 home] will save you $73 a week on payments but cost an extra $254,000 in interest than if you had opted for 25 years. It's a trade-off that works way better for the bank than your personal finances."
As the Canadian economy turns sour, what will be the cost of Canada's experiment with mortgage innovation? In what may turn out to be a too-little, too-late intervention, this summer Flaherty limited CMHC to ensuring mortgages of homebuyers who can make at least a five per cent down payment and who amortize their mortgages over a maximum of 35 years. The new restrictions will only take effect as of October 15, 2008, essentially closing the barn door after the horse has bolted.
Selling financial liberalization to the world
On the international stage, Canada is a major proponent of financial liberalization. At the WTO, Canada heads a group of delegations pressing developing countries to open their economies to the supposedly superior services of foreign financial institutions. The world's major financial conglomerates are claimed to have sophisticated risk management capabilities that can stabilize economies. You might think these days such a claim would not pass the laugh test, but that did not stop financial liberalization from being pushed at the WTO ministerial meeting held in July 2008.
The enormity of what's at stake in the WTO financial sector negotiations is revealed in a February 2006 bargaining request sent from Canada's Department of Finance to developing countries. Canada asked that foreign financial institutions be guaranteed rights to "establish new and acquire existing companies" in all financial sectors. This would mean among other things that countries would have to allow 100 per cent foreign ownership of their banks and insurance companies.
Canada has also asked that companies be given WTO enforceable rights to trade in derivatives, which has been described as a high-octane form of financial speculation similar to gambling. Warren Buffett famously called derivatives "financial weapons of mass destruction," destruction that is being witnessed on a daily basis on the world's stock exchanges.
While successive Canadian governments have been strong advocates of financial liberalization, the unfolding financial crisis might have suggested now is the time to show a little caution and back off these WTO negotiating demands. Yet a WTO submission from Canada dated Dec. 5, 2007, berates other WTO members for their lack of "ambition" in the financial services negotiations. On behalf of the co-sponsors of the submission, Canada claimed: "further liberalization of financial services will help promote economic growth and improved standards of living for all WTO Members…"
It makes one wonder. Just how bad would things have to get before the Harper government realizes further liberalizing the world's financial markets is not such a great idea?
Ellen Gould is a Vancouver-based consultant who has advised local governments, consumer groups and other organizations on the potential impacts of trade agreements.
Friday, March 27, 2009
New Report Reveals Why GOP Hates Unions: They Raise Wages, Boost Economy
Thursday 19 February 2009
by: Art Levine
The Hoover-like GOP has been working overtime to oppose President Obama's stimulus package while hoping he fails. Meanwhile, a report released yesterday by the Center for American Progress Action Fund essentially underscores the real reasons Republicans and the business community have taken another equally short-sighted economic stance: fighting workers' right to organize. As Unions Are Good For the American Economy points out with irrefutable statistics, unionization raises wages and boosts the economy because it puts more money in the pockets of American workers.
(The report itself, of course, doesn't directly accuse the GOP and corporate interests of opposing economic growth and recovery, but reading its measured analysis of the economic benefit of unions leads to the inescapable conclusion that anti-union business leaders have a misguided zeal for low wages at all cost - regardless of the impact on their own workers, their firms' productivity, their own long-term profits or the broader economy.)
In a conference call with reporters to discuss the report, former Labor Secretary Robert Reich observed: "One reason we're in the crisis we're in is because consumers have run out of money.... If they can't borrow anymore, and they have to rely on sinking wages, the entire economy is in trouble, because there's not enough demand out there." Reich added, "The point of the Employee Free Choice Act is to end intimidation and allow workers to join unions as they have a right to do. Workers want to be in unions [nearly 60% say they'd join if they could], and if they did have unions, they'd have higher wages and benefits. And if they had higher wags and benefits, they'd have the purchasing power to buy more goods and services."
In fact, the relative stagnation of wages over the last few decades - due in large part to effective unionbusting aimed at keeping labor costs low - helped bring on the economic meltdown because too many low-income workers were suckered into mortgages they really couldn't afford. Those mortgages were in turn bundled into the "toxic assets" - those various nearly-worthless investment vehicles - that have weakened the world's financial systems and brought on our free-fall recession. As Daily Kos diarist Trapper John reported last year, "AFL-CIO Associate General Counsel Damon Silvers lays out how the decline in unionization which began in the mid-Seventies led to the burst of the sub-prime bubble, and ultimately to today's recession. And he wrote it way back in April."
In contrast, this new Center for American Progress report points out, if unionization rates today were the same as they were in 1983, an additional $49 billion could be pumped into the economy by workers represented by unions. As the report co-authored by David Madland and Karla Walter says, "In 1983, 23.3 percent of American workers were either members of a union or represented by a union at their workplace. By 2008, that portion declined to 13.7 percent." And, as Reich and the report noted, "Workers in unions earn 30% higher than non-union workers."
As Beth Shulman, author of The Betrayal of Work, observed during the conference call: "A union job transforms a low-wage job into a good job" - and a pathway to the middle-class. And those workers will be able come into showrooms, real estate offices, auto dealerships and stores across America to start buying again and paying down-payments for a home. Shulman quoted a grocery store worker who joined a union, Linda, telling her, "For the first time, I can dream for my child," and who started putting away money for her child's college education. "Having unionization gives people a stake in the American dream," Shulman said.
But, as usual, big businesses and the GOP have taken a short-term, greedy look at their economic self-interest and determined they must fight the Employee Free Choice Act with all the weapons at their disposal. These include $200 million worth of smear ads , lobbying and misleading talking points; they're claiming (falsely) that it takes away the secret ballot and will wreck the economy.
Yet, as Shulman says, "The business community knows the basic facts that are in this report: when workers have unions, they have better wages, they have better benefits, they have a voice in the workplace, so it's not surprising they would take a hard line with this. This [bill] is important to ensure a road to the middle class and a right to organize." She's confident that the goals of the legislation will trump corporate special interests and right-wing ideology: "Clearly, it will get passed, because it's in the interest of working America."
And as Walter and other pro-union advocates point out, a level playing field for union organizing helps the economy. The higher wages paid by unions boosts productivity, reduce turnover and can even improve profits. Partially unionized Cosco, she says, has nearly 40% more in labor costs than its sister company, Sam's Club, but has almost double the per-employee profit margin. "They invested in the jobs and lowered turnover," she observes.
In fact, even the Heritage Foundation's much-hyped index of "economic freedom" in countries around the world pointed to economies with the highest rates of unionization in the workforce.
As for the right-wing's favorite whipping boys, the auto industry and the UAW, Walter and other experts say the blame should fall on the executives' poor manufacturing decisions - not the 10 percent of a car's cost made up by labor costs. And, despite the demonization of the UAW, the American auto-industry workers' wages are now roughly comparable to those in non-unionized Japanese factories, but it's the added costs of health care and pensions for union retirees over the decades that have actually raised costs. In addition, as the latest restructuring and cost-cutting plans show, the UAW has been willing to compromise - after giving up important gains in negotiations in earlier years.
The important new report shows that the original goal of the UAW - helping their workers achieve a decent, middle-class standard of living while working in factories - could also help today's low-paid workers, especially in the growing service and health-care sectors, boost their incomes if they had the right to join a union. As the AFL-CIO Now blog reports:
The report also provides a state-by-state analysis of increased union membership on wages. An increase in the rate of union membership of just 5 percent would increase total wages by $176 million in Nebraska, $503 million in Wisconsin and $852 million in Pennsylvania. These wages would be spread across the entire labor market.
"The essence of what labor unions do - give workers a stronger voice so that they can get a fair share of the economic growth they help create - is and has always been important to making the economy work for all Americans. And unions only become more important as the economy worsens.
"One of the primary reasons why our current recession endures is that workers do not have the purchasing power they need to drive our economy ... what is sustainable is an economy where workers are adequately rewarded and have the income they need to purchase goods. This is where unions come in."
Walter and Madland point to the disconnect between productivity and wages as a major factor in our economic crisis. Indeed, if wages had kept pace with productivity increases, rather than falling behind as they have in recent decades, average wages would be 42.7 percent higher. That's a sizable share of the economy that workers have lost, undermining consumer purchasing power and economic security - which, in turn, hurt the nation's entire economy in a vicious downward spiral.
That's why protecting union rights becomes so critical to economic recovery. As Karla Walter summed up her research, "The Employee Free Choice Act is not only important because it makes it harder for anti-union companies to harass workers, it boosts unionization rates, and improves millions of Americans' economic standing, providing families of those with union jobs a path to the middle class and pumping billions into the American economy every year."
At the heart of all this is a drive for fairness and a level playing field for workers - the right to bargain for decent pay and benefits. As Stewart Acuff, the special assistant to the president of the AFL-CIO, says caustically, "If the bosses can bargain with their boards of directors for their $200 million salaries and $10 million bonuses while they were screwing up their companies, workers ought to be able to bargain for their kids' health care and wages they can count on."
Art Levine co-hosts "The D'Antoni and Levine Show" on BlogTalk Radio at 5:30 p.m. ET, every Thursday, then archived online. This week's guests, Berkeley economist Brad DeLong and the Campaign For America's Future senior fellow, Bernie Horn, explain President Obama's bailout, stimulus and recovery packages - and the political fights over them.
Saturday, March 21, 2009
Friday, March 20, 2009
The Canadian Bankers Association is all offended that workers rallying to protest against job loss, inadequate unemployment insurance, government inaction and tough economic times would dare to point a finger at the obscene profits being racked up by the banks.
Tuesday, March 17, 2009
Monday, March 9, 2009
From the Service Employees International Union (SEIU) Campaign
"http://action.seiu.org/ceo Click to join our campaign!
Our country is on the verge of "armageddon," "nuclear war," and "the demise of a civilization." According to CEOs and their front groups, the fabric of our nation may well fall apart, all because of the Employee Free Choice Act.
In reality, the Employee Free Choice Act is a bipartisan, common sense economic recovery for working families that will pump billions into our nation's economy."
Saturday, March 7, 2009
2009: Gender Inequality at Work
On 5 March and as part of International Women’s Day, ITUC launched its second 8 March Report: Gender (in) equality in the labour market: an overview of global trends and developments.
A Saskatchewan Perspective from the Canadian Centre for Policy Alternatives (CCPA): Balancing the Scales of Pay Equity: The Need for Gender Analysis and Budgeting
Saskatchewan Federation of Labour (SFL): 2009 International Women's Day - News Release
- Not one of those unionized 12% of workers occupies a suite in the corporate boardrooms on Wall Street.
- Not one of those unionized 12% of workers sits on the Boards of Directors of the companies that are currently getting gifts of taxpayers dollars in the form of bailouts, so those same directors and executives can continue to enjoy their lavish lifestyles.
- Not one of those unionized 12% of workers travels regularly on a private jet.
- Not one of those unionized 12% of workers has had unfettered access to the political decision makers in the government capital buildings.
- Not one of those unionized 12% of workers made decisions that caused the financial ruin of hundreds of thousands of people, and then walked away - pockets bulging with $50 Billion of somebody else's money.
- Not one of those unionized 12% of workers makes a million or more a year.
- Not one of those unionized 12% of workers passed the laws that resulted in massive deregulation and put industries in charge of regulating themselves. Opening the door to rampant corruption.
- Not one of those unionized 12% of workers made the call to send their country to war on a lie.
- Not one of those unionized 12% of workers has been anywhere near the decision makers and people who actually caused this problem.
Obama's War with the Right (& Media)
By Robert Parry
February 28, 2009
In a startling ambitious budget message, President Barack Obama has thrown down the gauntlet to the American Right not only by tying the current economic crisis to the recklessness of the past eight years under George W. Bush but by tracing it back further to the anti-regulatory, anti-labor and anti-government policies of Ronald Reagan.
"For the better part of three decades, a disproportionate share of the nation's wealth has been accumulated by the very wealthy," the 142-page budget message states. "Technological advances and growing global competition, while transforming whole industries - and birthing new ones - has accentuated the trend toward rising inequality."
Though Obama lays the bulk of what he calls "a legacy of mismanagement and misplaced priorities" at the feet of the Bush administration, there is no mistaking his larger message - that the problems which were "exacerbated" by Bush's tax cuts and other pro-rich policies have been building since Reagan's 1981 inaugural declaration that "government is the problem."
Obama even made a glancing reference to that formulation in his preamble to the budget message. "We need to put tired ideologies aside, and ask not whether our government is too big or too small, or whether it is the problem or the solution, but whether it is working for the American people," Obama said.
To the American Right, those are fighting words, and leading right-wingers have already trotted out their curious charge of "class warfare," an ironic message given the fact that the growing disparity in American wealth reveals that "class warfare" has long been at the heart of Reagan-Bush policies - and the rich are winning.
Yet, while it may be audacious for the young President to take on the well-entrenched forces of reaction in Washington, there is another reason for Obama and his supporters to worry. The national news media remains largely enthralled by the pro-Republican rules of the past three decades.
In both right-wing and mainstream news organizations, stories continue to be structured as faulting Obama and largely absolving Bush (not to mention the iconic Reagan).
Look for example at the lead stories in the New York Times and the Washington Post on Saturday. Both describe the stomach-turning 6.2 percent drop in the gross domestic product during the last quarter of 2008. Though that was the last economic quarter of the Bush administration, the stories instead were framed around Obama's failures.
The New York Times cites "a sense of disconnect between the projections of the [Obama] White House and the grim realities of everyday American life." The Washington Post says "the worse-than-expected data fueled doubts about whether the Obama administration had adequately sized up the challenges it faces."
What is remarkable about the two stories - and similar ones at other leading newspapers - is that the name "Bush" is nowhere to be found. Instead of a negative slant against Obama, the stories might reasonably have read that George W. Bush left behind an even worse economic mess than previously understood.
The newspapers could have explained how Bush's policy prescriptions - such as large tax cuts for the wealthy, a neglect of regulation and the declining living standards of the middle class - had pushed the United States to the brink of economic catastrophe. There might have been at least one reference to how Bush contributed to "the grim realities of everyday American life."
Or some of the commentators who have been criticizing Obama's dire warnings about the state of the U.S. economy - accusing him of "talking down" the economy - might have extended an apology, admitting that the President was more correct than they were. They might even have noted that Bush actually had "taken down" the economy.
But that would require a break from the media paradigm of the past few decades - and there is no sign that the powerful right-wing news media has any intention of changing its ideological ways, nor that the mainstream news media will stop its endless attempts to prove it's not "liberal."
The only times Bush gets mentioned these days, it seems to be in the most favorable light.
For instance, while forgetting to mention that the fourth quarter of 2008 fell during Bush's presidency, the U.S. news media gave Bush lots of credit for Obama's announcement that he will withdraw all U.S. combat forces by Aug. 31, 2010. CNN and other news outlets cited Bush's Iraq War "surge" as the reason Obama could pull out troops.
In other words, Bush gets credit for Obama ending an unnecessary war that Bush launched almost six years ago, while Obama is faulted for the 6.2 percent drop in the GDP under Bush.
As Obama sets off on a hazardous political journey - seeking national health insurance, a "greener" economy, educational and infrastructure investments, and higher taxes on the rich - he can expect continued hostility from most of the American news media, both on the right and in the mainstream.
That may be a structural problem that could prove fatal for the President's goals.
Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. His latest book, Neck Deep: The Disastrous Presidency of George W. Bush, was written with two of his sons, Sam and Nat, and can be ordered at neckdeepbook.com. His two previous books, Secrecy & Privilege: The Rise of the Bush Dynasty from Watergate to Iraq and Lost History: Contras, Cocaine, the Press & 'Project Truth' are also available there. Or go to Amazon.com.
Friday, March 6, 2009
Thursday, March 5, 2009
Tuesday, March 3, 2009
In short, the article entitled: Economists Debate Pro-Labour Measure reports on a recent statement signed by the 40 economists that was sent to the U.S. Congress calling for passage of the "Employee Free Choice Act". The Employee Free Choice Act is strongly supported by President Barack Obama.
Additional coverage of this significant declaration including the list of endorsing economists has been submitted to the Economic Policy Institute and is posted on their website entitled: Noted economists: The Employee Free Choice Act is needed to restore balance in the labor market.
Amongst the list of notable economists are Nobel Prize winners: Joseph E. Stiglitz, Columbia University (2001 winner); Robert M. Solow, Massachusetts Institute of Technoloy (1987 winner); and Kenneth J. Arrow, Stanford University (1972 winner).
The statement seriously and significantly contradicts suggestions by the Sask. Party government and their corporate backers that various pieces of Saskatchewan's labour legislation were out of balance prior to recent amendments rammed through the legislature by Wall and his team.
A reading of these two articles will reveal the truth -- Saskatchewan's labour legislation prior to the Wall changes were already balanced. But they aren't any more, they are now heavily skewed in favour of the bosses and the corporations.
In addition, the articles make the case that more unionization and strong unions are "a critically important step in rebuilding our economy and strengthening our democracy by enhancing the voice of working people in the workplace."
Download a PDF version of the Economists' Statement by clicking here.....
"More labour leaders are killed in Colombia every year than in the rest of the world combined! Trade unionists are terrorized to put a chill on union organizing. This keeps unions weak and wages miserably low. It benefits businesses' bottom line and keeps Colombia attractive for foreign investment.
Who is being targeted? Prime targets are activists who are trying to organize or join a union and bargain collectively, or who are engaged in industrial disputes or in fighting privatization. They are teachers, prison guards, agricultural, food, and health care workers, and others from almost every sector.
Download the full comic here."
Monday, March 2, 2009
Almost everybody on the planet acknowledges this fact - well except the corporate puppets sitting on the government benches in Ottawa.
There's a great article over on the PublicValues.ca web-site entitled: "Hidden horrors" of federal budget threaten waterways, students, women, workers. Here's an excerpt:
"Hidden horrors" of federal budget threaten waterways, students, women, workers
Conservatives pursue deregulatory agenda by gutting environment assessment
by Ish Theilheimer
OTTAWA, February 26, 2009, PublicValues.ca: It has become clear since the federal budget was introduced that the Conservatives are using it to sneak ideologically-driven measures through Parliament. Opposition MPs have condemned many elements of the omnibus budget bill known as C-10, but the Liberals appear unwilling to press for amendments.
Among the most contentious "hidden horrors" of the budget are the elimination of the right to make human rights complaints in pay equity cases; punitive treatment of public servants, unions and students; and opening Canada's waterways to industrial exploitation without environment assessment." Read more here....