Sunday, 4 January 2015

Looking Forward to 2015


    Yes, as a political economist I tend to be more of a skeptic than my friends the economists. But I have no fundamental commitment to capitalism as an economic system. I see it as the primary barrier to the development of a democratic and more egalitarian society.

    So given the state of the world, it is not surprising, to me, that my predictions for 2014 were more on the mark than those who used to share an academic department with me. And there is no reason to expect that there will be any significant change in 2015.

Flood waters moving up towards our house.

    (1) The European Union remains in economic dire straits, and the governor of the European Central Bank is now about to desperately try to avoid a collapse into deflation. Everyone expects the ECB to begin quantitative easing, even though there does not appear to be any legal basis for doing so. Placing economic sanctions on Russia has only made things worse; a recession in Russia, which appears to be certain, will have a very negative impact on the EU.

    (2) Japan still is fighting deflation. Nothing that the government has done has made any difference. One still has to ask, is this the future of mature capitalism?

    (3) China. Last year the general concern was a slowdown in their economy and the large debt in the housing market. Those issues remain. What is new is the decision by the Chinese high command to shift the general direction of the economy away from the focus on providing cheap manufactured exports to serving the needs of the domestic market.  China is also taking a strong lead in building a political-economic alliance with Russia. This includes developing a new currency exchange system to bypass the U.S. dollar.

    (4) Commodity prices continue to be in decline. The major story for 2014 has been the collapse of the price of oil and gas. Analysis indicates that this is not due to a USA/Saudi conspiracy to stick it to Russia, but in general is due to the decline of consumption, the result of the general stagnation in the world economy.

    The one good news story for 2014 was the economic recovery in the United States. So the $4.5 trillion of quantitative easing created by the Federal Reserve did have some impact other than just boosting the stock markets and lining the pockets of those who were already rich. The USA has the advantage of “Military Keynesianism,” as defined by Joan Robinson: massive government spending in a country which claims to be a “free market.”

    The US economy has sagged in December, but overall economic growth will be close to 3% rather than the 2% that I suggested. Can the USA continue to grow with the world economy going in reverse?  It should be noted that the recovery has not been great in the employment area, and wages and salaries of workers have not been rising anywhere near 3%. In the past, lower gasoline prices have not led to increased consumer spending. A significant correction in the stock markets, predicted by many business economists, would likely lead to a decision by Americans to pay down their debts and reduce spending.

    Canada. And then there is Canada. Economic stagnation is the general trend. It is hoped by everyone that the recovery in the USA will have a positive benefit, given the fact that we are now even more dependent on exports to that market.

    But there is the major collapse of the oil economy. And as many people know, over the past ten years the manufacturing industry in Canada has been in decline, while there has been a shift to depending on petroleum and other raw material exports. No one these days mentions the term Dutch Disease. It is hard to see how this development will be a positive benefit for the country as a whole. Alberta, Newfoundland and Saskatchewan will feel the hit. The experts believe that the low oil prices are to be around for a good while – at least a year.

    As for me, the biggest concern is the flooding that is happening on the Canadian prairies. It has been a hard reality for the past three years. The last thing we want to see is a heavy snow fall this winter. Like yesterday.

Wednesday, 26 November 2014

Domesticated Animals

The Agricultural Revolution also created a revolution in the production of meat for human consumption. According to recent estimates, the world can now boast of more than a billion cattle, about a billion pigs and sheep, and around 25 billion chickens. This past summer I was given the opportunity of watching some of these animals domesticated by us Homo sapiens.

In late September I was walking through a pasture about a mile east of our place, land owned by our neighbour Marianne. There were about 40 cattle on this quarter. There had been lots of rain and snow in our area over the past four years, and the grasses are high and the sloughs are overflowing. The animals had not seen a human being since they were dropped off there in April. They stood in a group and all stared at us. Who were these intruders? I was a bit edgy, but there were no bulls around and Marianne had run cattle for many years. This must be much like it was before humans took control of the world.

As I drive into Bulyea to check the mail and go to the co-op, I pass a pasture where there are six cows and one horse, always very close together. I used to wonder of the horse now thought he was a cow.

On the Saturday drive into Regina, I pass a farm where two miniature burros always hang out in a field with six cows. They are the best of friends, never separated. After the wheat was harvested this year, the farmer put the cows in the adjoining field to clean up but left the burros in the pasture. The burros and the cows stayed right next to each other on each side of the barbed wire fence.

Marianne, who has been running the farm since her husband died about fifteen years ago, raises goats and sheep. Out in the middle of one pasture there is a fox den. Early in the summer this year’s small foxes emerged. They soon began to play with the new born sheep and goats, chasing each other around. Being of the older generation, we did not have our I-phones to record this event.

Among the goats and sheep is one black steer. He is distressed when put in a different pasture by himself. One day I drove by the farm and saw the steer in the small pasture next to the barn. The only other animals with him were the chickens and ducks. He was running back and forth along a barbed wire fence, doing his best to try to keep a fox from coming into the farm yard.

A pair of domestic geese had been living on my neighbour’s farm for a few years, hanging out around the dugout and the farm yard. One of them disappeared this summer, most likely a victim of a coyote or a fox. The remaining goose now waddles out every morning with the sheep and the goats and spends the day with them in the pasture.

Norm, who has the farm behind us, runs cattle on the adjoining quarter. He also has four horses there, as he and his daughter ride. The four horses are rarely seen except standing together, no more than two or three feet apart. They ignore the cattle.

A short way down the grid road I had a very productive garden on Dale’s farmstead. It is surrounded with barbed wire fence as the neighbour would run some of his cattle there before and after harvest. One day I drove into the yard and there were around a dozen cows next to the fence as well as three cows on our side of the fence, in the garden. I walked towards the animals as I was going to open the back gate and let them out into the field. They freaked, as they did not know me and feared the worst. An older Holstein milking cow and one of the calves ran and jumped over the fence. The heifer ran and scooted under the barbed wire fence.

I am currently reading Yuval Noah Harari’ Sapiens: A Brief History of Humankind. He argues  that “domesticated chickens and cattle may well be an evolutionary success story, but they are also among the most miserable creatures that ever lived.”

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Wednesday, 8 January 2014

Will We See the End of Economic Stagnation in 2014?

NOTE: It is quite evident that I have been neglecting my blog. There have been few postings in the past six months. The problem is that I am working full time on a new book. It will take a couple of years to research and write. The subject is the rise of agriculture and the development of class society. My approach is that of political economy and sociology. My extensive reading over the past six months has only made me more pessimistic; the steady advance of capitalism seems to have made it unlikely that there will be a shift back to a more democratic and egalitarian social system. As one looks at the rapid onset of climate change, and the unwillingness of any governments to take this crisis seriously, we seem most likely to be headed to some sort of catastrophe. Happy New Year!

This is the time when once again economists and their pretenders make their annual predictions of what we can expect in the coming year. I did not do badly last year; these were my predictions:

(1) The U. S. economic recovery would be weak.
(2) The European Union would experience a double dip recession.
(3) In spite of the pledges of the new Japanese government, deflation would continue.
(4) There would be only weak economic growth in Canada, due to a large extent to the all time high level of household debt to income (165%).
(5) The Canadian housing bubble would begin to deflate.

I was off on the last prediction. There are some indications in some markets that the peak of the bubble has been reached, but what is happening is not general. All the powers that be still insist that there is no bubble; they all have a very large stake in preventing it from happening, the politicians, the banks, the media, the realtors, etc. The Bank of Canada takes the position that we should see a slight decline in sales and prices, a “soft landing” of perhaps 10% over a few years.

The Housing Market Today
However, the fact remains that the average price of a house in Canada is twice that of the United States. Over history the price of an average house has ranged between two and three times household income. It is now still over five times household income, on a national basis. It is over ten times in Vancouver. This can’t continue.

Of course all commodity bubbles collapse, and housing is no different. It will come, sooner or later. The bubble has been created by the lowest mortgage interest costs in history, the role of Central Mortgage and Housing Corporation in guaranteeing lenders (not home owners), the willingness of banks to lend (guaranteed) money to poor risks, and the policies that have been taken by Stephen Harper’s Conservative government. [Remember CMHC guaranteed mortgages for 40 years with no money down?]

Incidently, the International Monetary Fund, Germany’s Deutsch Bank and the Organization of Economic Co-operation and Development (OECD) have recently argued that the housing bubble in Canada is the largest in the industrialized world. The OECD and Deutsch Bank argue that the price of housing is overinflated by 60%. They base this analysis on historic trends, the ratio of buying a house to renting, and the ratio of house prices to household income.

What Can We Expect in 2014?
Well of course all the smart people at the top are predicting an economic recovery in the USA which will benefit Canadian exporters and the Canadian economy. My view is that the rate of economic growth in the USA will be closer to 2% than the 3% - 3.5% anticipated by business economists.

In all the western countries, the central banks have set interest rates close to zero. The Fed in the United States is still printing money (Quantitative Easing) at a rate of $75 billion a month; this now totals over $4 trillion since 2008. One results has been a bubble in the U.S. stock market, as almost all this free money floats up to the top 1% of income earners.Corporations are hoarding cash as they do not see any profitable investments.

Unemployment and underemployment remain high. In Canada we have an official unemployment rate of 7%. But if you add in the workers who have dropped out of the labour market and those who are working involuntarily part time it rises to 17%. Then you have to add in the significant rise in the number of people in precarious work: part time, contract, temps, etc , who are paid much lower than regular workers and who have no benefits. This is a major trend in the labour market. Throughout the western world, youth unemployment has been steadily rising. A look at what new jobs are being created reveals the high concentration in the areas of food service, personal care aides, retail sales, waiter and waitresses, unskilled labourers, and office clerks. The wages for these jobs range between $9 and $11 per hour.

With the move to neoliberalism, we have seen a major shift away from progressive income taxes and taxes on wealth. As a result, over the past ten years most workers have experience no increase in real income. Wealth and income is being concentrated at the top. In 2013 in Canada the top 1% of income earners received $381,000 in income, this was ten times the Canadian average.

Problems in the World Economy
There are few signs that the economic stagnation that the Great Recession started in 2008 is about to end. The European Union is still trying to get out of its financial and economic funk, and few are predicting that the overall rate of economic growth will exceed 1% in 2014. The rate of inflation in Europe is now below 1%, and there are growing fears that this could tip into deflation. There are also a number of elections scheduled for this year, and commentators are worried about the rise of the new rightist parties. Great Britain is very close to falling again into recession; they have their own housing bubble crisis.

The Japanese economy remains in deflation. The BRICS – the more advanced developing countries – are no longer the successful capitalist economies; their domestic and international debt levels are forcing the introduction of austerity programs.

The big question mark is the state of the Chinese economy, now the second largest in the world. Over the last ten years the Chinese government has used credit to keep the economy growing at a rate above 7%. Between 2008 and 2013 government directed credit rose from $8 trillion to $24 trillion. Commentators warn of the extensive debt taken in by governments at the local level. How long can this be sustained?

World commodity prices are in decline. This is bad news for Saskatchewan, which has experienced a booming economy with the expansion of the oil and potash industries.

So overall, the picture of the world economy is not that great. Everyone seems to be placing all their hopes on a recovery in the USA. But our southern neighbours are not what they used to be. Corporations have moved their manufacturing overseas to low wage areas. The top 10% of income earners dominate the economy. But how much can they buy? How much debt can those on wages and salaries afford?

Yes, there is a difference between the economists and the political economists.



Tuesday, 19 November 2013

Why I Love Rob Ford

Political Allies:  Rob and Stephen    
Some years ago we moved to Saskatchewan. There was the appeal of the wide open spaces. But I was primarily attracted to the province because of its reputation for progressive democracy. The farmers and their organizations, who had dominated the political system, pushed for policies benefiting the community as a whole. They supported Crown Corporations that provided good public utility services to everyone. They backed the co-operatives, credit unions, the Saskatchewan Wheat Pool, marketing boards where the majority of producers made the decisions, and the Canadian Wheat Board, which had been strengthened at the end of World War II with the support of all the major farm organizations across Canada.

There was also the CCF-NDP government headed by T. C. Douglas. They implemented the first progressive trade union act in Canada and encouraged government workers and teachers to form unions and bargain collectively. A broad range of social programs had been implemented, including a social assistance program that provided recipients with an income above the basic needs level, the highest in Canada. They were the first to implement free hospitalization and then public medicare. The prevailing view of the mainstream churches was the Social Gospel, that of the Sermon on the Mount: I am my brother’s keeper.

But all that has changed. Saskatchewan is now known for the strong support we give to Stephen Harper’s new right wing liberal movement. Our provincial government, a group of Harper supporters, has an approval rating in the polls that reaches 70%. With this change we now have a new set of outspoken political activists who make us cringe.

We have the strongest support across Canada for the right not to register guns and for everyone to own an assault rifle. We have vocal political activists who hate gays and lesbians. There is a strong movement to oppose feminism and presses to deny women the right to control their own bodies. We are the home of Real Women, one of the last remaining women’s organizations, one which is opposed to day care and wants women to stay home and take care of the kids. It is reported that half of their members are from our province.

The mainstream religious organizations are in decline, and those of the Christian fundamentalists are on the rise. The provincial government and local school boards are now using public funds to support “faith based” private schools, where they can teach creationism. They are all in solidarity with our Prime Minister, who chose Calgary as his home, and who is an active member of the Alliance and Missionary Church, which shares their patriarchal values and believes in Armageddon and The Rapture. That is true, believe it or not.

Saskatchewan can now claim to have the strongest group of climate change deniers. Our politicians support any foreign-owned transnational corporation that wants our natural resources, which we give away for virtually nothing. The oil and mining executives who report to the Fraser Institute rank Saskatchewan at the top of the list of the best places to invest. The NDP and the trade union movement are dead in the water. This is The New Saskatchewan.

So I am overjoyed to see Rob Ford in action. He too is a strong supporter of Stephen Harper and his new version of the Conservative government. But Canadians now know that it is not only backwater Saskatchewan that produces crazy right wing politicians. There are some prominent wackos in office in Toronto, home of Bay Street and the TSX.

Friday, 25 October 2013

Fifty Years as a Canadian!

We are starting to see advertisements noting that the 50th anniversary of the assassination of U.S. President John F. Kennedy is coming up soon. These reminded me that I arrived in Saskatoon in August 1963 to begin teaching in the Department of Economics and Political Science at the University of Saskatchewan. I actually camped in the city campground for a few weeks while I sought a place to rent. My wife Betty Meyers and our daughter Delia arrived a bit later. The first year in Saskatoon we lived in a small World War II house at 909 - 8th Street East. It was a cold winter, but very little snow.

When President Kennedy was shot on November 22, I was asked to speak to an assembly of students and others at the university, giving my assessment of Kennedy and speculating on what we might expect from the new President, Lyndon Johnson. It was my first political speech in Canada. Joining me as a speaker on the podium was Fred Gudmundson, and thus began a long and close friendship. It did not take long for Betty and me to realize that we had made the right choice when we decided to become new Canadians.

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Saskatchewan: The Roots of Discontent and Protest (2004)

Extract from the Preface:

  The Department of Economics and Political Science at the University of Saskatchewan was not as pure a political economy department as at other Canadian universities. But the scholarly work of its faculty was clearly in the British tradition of political economy, it had political economy courses, and there was an honours course in political economy and history. Many of the people teaching in the department also had close ties to the Co-operative Commonwealth Federation (CCF) government, the first social democratic government in North America.
    When I arrived at the department in August 1963 the first person I met was Cy Gonick. He was in the process of moving to the Department of Economics at the University of Manitoba. We discussed his plan to create Canadian Dimension Magazine, and he invited me to contribute to it and be on the original board of directors.
    The second person I met was Ed Safarian, who had replaced the deceased George Britnell as chairman of the department. Safarian, who had a doctorate from the University of California, would begin the shift in the department away from political economy and toward an eventual split between economics and political science. He introduced me to Vernon Fowke. When my wife Betty and our young daughter arrived in Saskatoon, we spent our first weekend together in Saskatchewan at Fowke’s cottage at Wakaw Lake.
    Shirley Spafford has documented the early history of this department and its political economy tradition in her book, No Ordinary Academics (University of Toronto Press, 2000). There was an early conflict between William Walker Swanson, the first chairman, and those who followed. Swanson, born in Scotland, had a doctorate from the University of Chicago, and while he did important research on the wheat economy, he was a staunch free market liberal and was hostile to the Saskatchewan tradition of populist politics and the CCF.

A tradition of serious scholarship
    The department changed under the new chairman, George Britnell. A local boy from Moosomin, he studied under Harold Innis at the University of Toronto. Vernon Fowke had been born at Parry Sound, Ontario, but his family had moved to Melville, and he attended the University of Saskatchewan. Ken Buckley, another leading figure in the department, was from Aberdeen, just down the rail from Saskatoon; he had also studied under Innis at the University of Toronto.
    The most amazing person in the department, however, was Mable Frances Timlin. Born in Wisconsin, she graduated from Milwaukee state Normal School and in 1916 moved to Saskatchewan to teach school, first in Bounty and Wilkie, and then in Saskatoon. She earned a bachelor’s degree in English at the University of Saskatchewan while at the same time reading economics and political science. In 1935 she was appointed instructor in economics. She was the real theorist in the department. She completed a doctorate in economics at the University of Washington at the age of 40, authored widely acclaimed works on Keynesian economics, was the first woman social scientist admitted to the Royal Society of Canada, and was the first woman elected to the executive committee of the American Economics Association. While she had retired in 1959, “Timmie” regularly came around the department to engage in wide ranging discussions. I well remember a conversation with her when she strongly attacked mathematical economics and neoclassical model building as contributing nothing to the understanding of the Canadian economy. It was far removed, she argued, from the reality of Canada’s integration with the United States, dependence on resource extraction industries, and enormous size and pronounced regionalism.
     It was under these four academics that the department earned its reputation as a Saskatchewan department devoted to the farm movement in western Canada and social democracy. The province was their home, they had lived here during the depression, and they well knew the problems of the farmer. They also believed that academics had an obligation to serve the people who paid their salaries. They gave lectures all around the province, worked for royal commissions, and advised governments. When Tommy Douglas’ CCF government was formed in 1944, George Britnell, Vernon Fowke, and Dean F. C. Cronkite of the College of Law served as the members of the Economic Advisory Committee. Britnell became an adviser to the leftist government of Guatemala under Jacobo Arbenz (1950-4), overthrown by a U.S. government-sponsored military coup.
     Unfortunately, Fowke died prematurely, and I only had the benefit of his kindness and knowledge for several short years. He introduced me to Innis, the metropolitan hinterland thesis of Canadian political economy, and always stressed that we should understand the power of capital in economic development. Ken Buckley’s office was across from mine, and we had long discussions about the nature of capitalism and Canadian economic development. He introduced me to duck hunting. Norman Ward, the senior political scientist and resident humourist, introduced me to grouse and partridge hunting. Ward, one of Canada’s best known political scientists at that time, was the first to tell me that George Britnell taught more political science courses than economics or political economy. Britnell insisted that “anyone can teach political science.” Ward liked to say that being an academic was the next best thing to being a bum: you got paid well for doing what you really liked to do.
    The other major influence on my development as a political economist came from Irene M. Spry, who only taught in the department for one year, 1967-8, before moving on to the University of Ottawa. She was a delightful woman, and as her office was adjacent to mine, I spent many hours there. She was still working on the Palliser books. But along with Helen Buckley, who was in the Centre for Community Studies, she was one of the very few academics who had any intellectual and political interest in the impact of the National Policy on the Aboriginal people in Western Canada. Spry was an impressive scholar with degrees in political economy from London School of Economics and Cambridge University, where she studied under John Maynard Keynes and the Marxist scholar, Maurice Dobb. She also had a masters degree in Social Research and Social Work from Bryn Mawr College. At the University of Toronto she worked with Harold Innis. She and her husband, Graham Spry, had co-founded Saskatchewan House in London. Graham Spry was the Agent-General for the province in London between 1946 and 1967. Like her husband she was a long time social democrat and member of the League for Social Reconstruction in the 1930s. It was a great loss when she moved on to the University of Ottawa. I was pleased to read that right up to her death at age 91 she was a political activist as well as a scholar. She encouraged me to be active in politics, insisting that if you hide away in the university you quickly lose touch with the views of ordinary people. I am still waiting for the book she was working on at the time of her death, From the Hunt to the Homestead, a political economy history of the prairies. She was an active supporter of the Associated Country Women of the World.
    Over the years many well known scholars taught for a short time in this department including Frank Underhill, James A. Corry, Robert MacGregor Dawson, James Mallory, Bernard Crick, Hugh Thorburn, and Gordon Thiessen. While I was there Bruce Wilkinson, Ken Rae, Elias Tuma, John Cartwright, Don Rowlatt, and Robin Neill moved on to major careers elsewhere. Jack McLeod, who switched to the University of Toronto, wrote Zinger and Me on academic life in Saskatoon.

Commitment to the Saskatchewan tradition of social democracy
    The University of Saskatchewan’s tradition in Canadian political economy was a combination of Harold Innis and John Maynard Keynes. It was liberal social democratic and materialist. In the 1960s a new political economy was emerging in Canada which looked to the traditions of continental Europe. I spent the 1970-1 academic year at Atkinson College, York University. Daniel Drache and I shared an office and a year trying to find more radical materials to include in our teaching of Canadian political economy. The older tradition identified with Harold Innis was almost completely devoid of human content. There was absolutely no discussion of social class in Canada, nothing on the development of the trade union movement or the Communist Party, and precious little on the nature of the capitalist class. There was virtually nothing on the relationship between the capitalist class in Canada and the many dominant foreign owned corporations. There was almost nothing on the relationship between the European settlers and the Aboriginal population nor on the role of women in the economy and society. All of those subjects are now very well covered by the new political economy.
    The 1960s and 1970s were exciting times to teach in university. A large number of students were not only active in politics they were actually interested in reading, learning and trying to find the answers to the bigger questions. They were not satisfied with being spoon fed the usual liberal dogma. They wanted to read Marxism and study imperialism. Today most students focus on getting good grades hoping that this will land them a job after they graduate. Most go out of their way to avoid controversy. There are no active student course unions any more. Quite a few students do have a critical approach to their studies, but they are very cynical about changing anything. But there are still some who become active in the anti-war movement, the anti-globalization movement and Green politics. In my own early work and development as an instructor, researcher and writer in the new Canadian political economy I benefitted from a close relationship with Ed Mahood and Howard Adams, both of whom taught in the College of Education. They provided the critical intellectual support that was largely absent from my rather conservative colleagues.

Moving away from political economy
      The department changed under the direction of Ed Safarian and Bob Kautz. More Americans were hired as well as more Canadians who had received their advanced degrees in the United States. A crisis developed in 1971 when John Richards, a very popular professor, was not rehired. Richards was born and raised in Saskatchewan, had gone to the University of Saskatchewan, and was completing a doctorate at the University of Washington in St. Louis. It was widely believed that he was “fired” because he was a promoter of the Canadian tradition of political economy while the majority in the department wanted to move to the American tradition of completely separate disciplines of economics and political science. Others believed that he was not rehired because he was active in the Waffle group, the left wing organization within the New Democratic Party. Indeed, in the 1971 provincial election he was elected to the legislature from Saskatoon-Sutherland. He was a close personal, political and academic friend of mine at the time.
    In any case, hundreds of students protested by occupying the department for weeks on end. Professors were blocked from getting to their offices. Student course unions demanded that Richards be re-hired. The department was deeply split, never really recovered from this conflict, chose to follow the American road, and formally split in two. A few years after the occupation I decided to leave the department and move to British Columbia. The political economy tradition disappeared from the two new reconstructed departments but re-appeared as the new Canadian political economy in the Department of Sociology.
    In British Columbia I was a fruit grower in the Okanagan, but also a researcher and writer specializing in the political economy of food and agriculture. I became involved in the environmental movement. But I never lost touch with my friends in Saskatchewan. In 1986 John Conway and Joe Roberts asked me to return to the University of Regina as a special lecturer. It was natural that when I returned it would be to the University of Regina. Academics at this university had been major participants in the development of the new Canadian political economy. I found my home in the Department of Sociology which had developed a reputation in political economy, rural sociology, and continental integration, my major fields of interest.



Saturday, 7 September 2013

Why Privatize Public Services?

NOTE:  A slightly shorter version of this post was published in the Leader Post, September 16. 

The mainstream media and our political leaders insist that the only real question involved in the building of a new sewage treatment plant for Regina is who can do it cheaper, the government or the private sector. But there are much more important issues.
Regina's Wascana Lake

In the 19th century in Canada and elsewhere basic public utility services were provided by private corporations. As we know well in Saskatchewan, the private corporations provided services only where they could make a profit. Governments were then elected that created Crown corporations on the provincial level and municipal public services on the local level. The goal was always to provide essential public utility services to all, no matter where they lived or how low their incomes happened to be. This was the co-operative democratic approach.

The Reagan/Thatcher revolution
Beginning in the mid-1970s, private capital and their organizations made it clear that they would like governments to privatize these successful public services. This was one of the major policy goals of Margaret Thatcher’s Conservative government in Great Britain and Ronald Reagan’s Republican administration in the United States. In 1989 the Thatcher government privatized the water/sanitation public utilities in England and Wales.

In Saskatchewan, the Conservative government of Grant Devine (1982-91) closely followed the model set by the Thatcher government as it privatized a number of important provincial Crown Corporations. They even used Thatcher’s advisers.

Stephen Harper’s Conservative government shares a similar political ideology and that is why the federal tax money provided to local governments for constructing new public facilities is limited to projects which involve contracting out construction and operation to private corporations.

The spread of right-wing neoliberal program
This political program, pushed by all the large business organizations, was carried over to international organizations. The World Bank, the International Monetary Fund and the World Trade Organization created a policy package known as “The Washington Consensus.” As governments in the less developed countries experienced financial difficulties, these organizations provided some monetary assistance as long as they agreed to the package of structural adjustment programs that included deregulation and the privatization and contracting out of public services.

When the housing and finance industries collapsed in 2008, governments went deep into debt to bankroll the private banking sector. As a result, we are now experiencing “austerity programs” in the advanced industrialized countries. In Europe the World Bank, the International Monetary Fund and the European Common Market provide assistance to governments with serious debt problems but insist that they adopt a package of policies which include the privatization and contracting out of basic public services. They also insist that there be major cuts in public sector employment.

The general attack on the public sector trade unions
For good reason CUPE is concerned about these developments. The neoliberal agenda of the political right includes a strong attack on the trade union movement. Where privatizations have taken place in public services, management numbers and remuneration have increased significantly while large numbers of front line workers have been sacked. Our neighbours who work for the City of Regina have every right to earn a decent income that allows them to raise a family and even buy a home. No one wants to have to work for Walmart wages and benefits.

Regina used to be an NDP town. There was always a majority on City Council who supported the NDP. The general public had greater influence over major policy decisions. Builders and developers were not in complete control. The neoliberal policies of the Romanow-Calvert NDP governments disillusioned great numbers of NDP supporters. They left the party, and it is clear that many don’t even turn out to vote. When the turnout in municipal elections falls to 25 to 33 percent of eligible voters, it is inevitable that right wing political forces will win. Numerous studies show this to be the case. That is why the Mayor and the City Council are so sure they are going to win the referendum.

Friday, 21 June 2013

The stupidity of Saskatchewan's "clean coal" project

  What happened to all the environmentalists in Saskatchewan? Are they only interested in nuclear power? Why are they all silent about Sask Power's ridiculous "clean coal" project? Are they all silent because this project was first pushed by the Saskatchewan NDP government?
Sask Power's Boundary Dam facility
   The final face of the carbon capture and sequestration project at Sask Power's Boundary Dam Station is being pumped by the mainstream media. Sask Power executives argue that we have hundreds of years of "cheap" coal to burn, why should we turn our backs on it? The NDP and the Sask Party agree. The project as it currently stands has a new coal-fired generator which is rated at 160 megawatts (MW). After the energy used to capture the carbon, it will produce between 100 and 115 MW to pump onto the grid. The total cost is reported to be $1.24 billion. What a bargain!
   The project is again being promoted by Bruce Johnstone, the financial editor of the Leader Post. Putting everything else aside, haven't these people ever heard of opportunity costs? If $1.24 billion was spent on other alternative energy projects, how much carbon dioxide would be saved? How many more jobs would be created? Since no one wants to take on this issue these days, and I am too busy to again visit the subject, here is a piece I wrote in 2007. There are very good alternatives to burning our grossly polluting coal.

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“Clean Coal” is the Wrong Road to Take

by John W. Warnock

Regina Leader-Post
May 3, 2007

    Lorne Calvert’s NDP government and SaskPower seem determined to saddle the people of Saskatchewan with a new “clean coal” generating facility. The research has been done, the Estevan site has been chosen, and the project’s supplying corporations are on side. The 300 Megawatt (MW) plant will cost between $1.5 and $2.0 billion. But this is clearly not the best way to produce energy nor to reduce carbon dioxide greenhouse gas emissions.
    In the first place, coal fired generators are very inefficient, capturing only around 33% of the energy in the combustion process; the remaining two thirds of the energy produced is dissipated into the environment. This waste energy cannot be captured and used where power plants are far removed from industrial projects and population centres.
    The “clean coal” aspect of this project is the Oxyfuel system used to capture around 90% of the carbon dioxide, compress and chill it to liquid form, and then pump it deep into the ground for sequestration. Unfortunately, this is an expensive and inefficient process. Of the total 450 MW of electricity to be produced by the new plant, 150 MW will be used in the Oxyfuel and geological storage process. As many studies have argued, down the road carbon dioxide sequestration may permit the continued use of coal for power generation. But it is no solution to the current problem of greenhouse gas emissions and climate change.    
    Furthermore, the carbon dioxide extracted by the proposed SaskPower plant will be used to enhance oil recovery. The liquid carbon dioxide is pumped into the permeable oil bearing rock strata, is dissolved in the oil which reduces its viscosity, and it then sweeps the more mobile oil to the production wells. This is the system presently used by EnCana at Midale. Some of the pumped carbon dioxide escapes in this process. And of course this strategy completely undermines the goal of carbon sequestration as more petroleum is extracted and consumed, creating even more greenhouse gas emissions.
    Building a very expensive new power plant at Estevan further commits Saskatchewan and Sask Power to a highly centralized system of electrical power production and distribution. We have a great many alternative sources of energy, and their development requires a decentralized system. We must also plan for disasters which are caused by climate change. In January 1998 there was an ice storm in Quebec, and many areas were without power for several weeks. What would a similar event do to Saskatchewan?  How many people would die?


Seattle shows how it should be done
    Last January I was in Seattle doing research and I looked into the energy strategy of Seattle City Light, a municipal public utility. In the 1920s they built three dams on the Skagit River which serve as their base supply. They also contract for some power from the Bonneville Power Administration. In 1976 they opted out of the Washington Public Power Supply plan to build nuclear reactors and chose instead to promote conservation. In 2002 they contracted to purchase power from the Stateline Wind Project on the Oregon-Washington border.
    But the Seattle area has the highest annual population growth of any region in the United States. Therefore, in 2006 Seattle City Light produced an integrated plan for power development for the period 2007-2025. Over this period they will add 460 MW of electrical power. This will include 142 MW from conservation, 100 MW from geothermal development, 55 MW from additional wind sources, 25 MW from landfill gas, and 15 MW from biomass energy. The total projected capital cost of these additions is only $170 million.
    For many years Seattle City Light has been providing direct financial incentives to promote conservation and the purchase of more efficient appliances. They have a very basic demand management system: for the first 10 kilowatt hours (kWh) consumed a household pays 3.76 cents a kWh, above that the cost is 7.93 cents kWh. They are now promoting individual household and business production of solar, wind and biomass electricity. Through a net metering system households are paid market price for the energy they provide to the city grid. Households and businesses who install new generating facilities get city, state and federal rebates and tax incentives.
    Seattle City Light is only one example of how communities can shift to renewable energy. How long do we have to wait before a Saskatchewan government takes this issue seriously?

John W. Warnock is a Regina political economist and environmental activist.