The Strategic Vision for Trudeau Government of Canada 

               2015-12-06 10:28:27|  分类： Frank-Writings

               Frank  Dec. 5, 2015  in Waterloo, Ontario, Canada

    http://frank-waterloo.blog.163.com/blog/static/20523902920151161028273/

   In the Era of agricultural economy, the geographic space is the living space. In the Era of market economy, the market space is the living space.

     “High housing and land prices will destroy competitiveness of manufacturers, without competitive products; a country will lose living space.”

    It is burying own nationals, if the government allows speculators free speculation.

            --- Frank The speculators are destroying the foundation of Canadians survival

    Manufacturer is the basic cell and main driving force of the real economy by integrating the intelligence, Capital, Knowledge, Technology, and Market together to play the role as protagonists of scientific and technological innovation.

    Manufacturer is the organizer of large-scale socialized production, it organizing and training social members to create material wealth with creating jobs for living making and tax revenue for social governing, thus to create a stable community, by which that people can work and live to enjoy a prosperous life.

    Manufacturer is the cornerstone of social stability and sustained prosperity.

    With rapid development of low-cost manufacturing in underdeveloped countries, Canada's traditional manufacturing has been permanently losing. 

                --- Frank  Canada's economy is faced at vital crossroads 

    Contents

             Introduction

    1…Financial economy will lead world economy recession further

           1.1…The cause of 1928 and 2008 financial crisis is still in active        

           1.2…Financial economy is over 10 times larger than that of real economy

           1.3…Financial instruments are used to destroy world economy          

           1.4…Real estate is a kind of financial instrument in harming real economy

           1.5…The biggest social inequality is that rich individual with poor government

     2…The Supply-side economics will lead world economy recession further

            2.1…Demand side economics is acting as economic heroin

            2.2…It is not faulty of demand side economics but dogmatic politician

            2.3…Germans become savior for those victims of demand side economics

3…New Govt. Canada will be going on demand side economics

    4…The fatal weaknesses of Canadian economy – low productivity

            4.1…German immigrant was shocked by lax office culture of Canada

            4.2…Wrongful social governance causes low productivity

            4.3…It is that poor management causes businesses decline

            4.4…The bad corporate culture forced good manufacturer moved to Mexico

            4.5…A NCR’s supervisor dared not supervise in work and had to dodge 2 weeks every year

     5…The success of Germany reflects the weakness of Canada

     6…The strategy for Canada with world economy continues towards recession

           6.1…Legislation by copying ISO standards and Amoeba Management 

Introduction

Since 2008 financial crisis, people have been looking forward to economic recovery; however it seems to have no signs to comfort the eager hope.

As my view, the world economy will continue towards recession, due to that condition in harming real economy has not improved yet, especially, the greedy activity of wild developed financial economy plundering real economy has not been governed rationally and effectively, it will make profit margin of manufacturers too narrow to survive, and the manufacturers are the main basis of real economy.

On other hand, the two big economies – the United States and China is both reviewing its economic development policies, which may leads economy from current Demand side economics turning to Supply-side economics. Such relaying needs a longer time for operable adjustment economically and social structurally, it would inevitably slow down current economy. Especially, that China may put it into practice soon.

For a while, the issue of US Federal Reserve hiking interest rates has become a hot spot. Various projections are one after another; especially the improvement of the US employment gave people an illusion of economic recovery. This is the result that observes problems superficially without diving into the root level to observe and analyze the problems.

In the analysis of economic indicators, people pay too much attention to employment, housing sales, and GDP, etc., while ignoring the most essentials. As a result, it gives people a brief happy, soon be brought back into sadness.

If we carefully study the specific economic data, you will find that world economy is quickly deteriorating.

Dec. 7, 2015, the article China slowdown to test its bonds to sub-Saharan Africa reports that: “Copper, which makes up more than 70% of Zambia’s exports, is now worth less than half of its peak price just a few years ago.”

Dec. 8, 2015, a Mandarin article China's economic slowdown tests China-Africa relations reports that, in 2014, Africa's trade with China amounted to $ 220 billion. However, in the first half of 2015, Chinese direct investment to Africa declined more than 40 percent, and imports from Africa were down nearly 43 percent.

Faced with the global spread of the adverse economic situation, we are really incompetent and helpless. However, to manage Canadian economy better is possible.

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    1…Financial economy will lead world economy recession further 

Historically, the financial economy has been playing a key role in economic development, whether boom or recession.

As economic strategy, there are many aspects that need to be considered carefully, among them that well understanding financial economy and smartly dealing with its side effect should be first concern. 

   1.1…The cause of 1928 and 2008 financial crisis is still in active

In the wake of the 2008 financial crisis and the rise of the Occupy movement, the issue of income inequality has gained public awareness.

2013, American economist, Professor Robert Reich distills the story through the lens of widening income inequality to have presented documentary film Inequality for All. It indicates that income inequality currently at historic highs.

Over the last thirty years, before the latest recession, the U.S. economy doubled. But, these gains went to a very few: the top 1% of earners now take in more than 20% of all income—three times what they did in 1970. Inequality is even more extreme at the very top. The 400 richest Americans now own more wealth than the bottom 150 million combined. While this level of inequality poses a serious risk to all Americans.

Following is the video screenshots from Inequality for All.

                   

     The two times economic crashes well match the peak point of income inequality at in 1928 and 2007. However, this trend cannot used to predict future trends due to in that period, world suffered World War II that interrupted normal development of economy.

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From the peaks of relative financial wages, we can easily speculate the huge volume of financial economy or paper economy that is buying and selling on the financial markets to make money by money, in nature, the activities of financial economy are plundering real economy - that is actually producing goods and services, which is really relating the needs for human survival.

Due to that the activities of financial economy are speculating with currencies, stocks, and the materials for manufacturing, which will play a role of plundering real economy and also the money that gained in such activities has to be exchanged as material wealth for life survival finally, so that, in essence, those activities in financial markets is grabbing material wealth and is plundering the industrious people who are hard-working on creation of material wealth.

From above three photos, we can also easily speculate that, the two times economic crashes are caused by that wild developed financial economy.

In 1997 – 2007, in the United States, the finance was fastest development part of the American economy.

Follow is the video screenshot from Inequality for All.

In 2009, in the time of absolutely recession, the 7 highest paid Hedge funds managers were still taking more than Billions Dollar each.

      Until to today, the over-developed financial economy is still not under proper control. It is still in harming economy.

1.2…Financial economy is over 10 times larger than that of real economy

       Aug. 19, 2015, in the article The speculators are destroying the foundation of Canadians survival, I indicate that:

       “For the volume of overdeveloped financial economy, the professor of History of Harvard University Niall Ferguson made an introduction.”

“In the start of the documentary The Ascent of Money: A Financial History of The World that written and presented by the professor introduces with that: ‘In our time, we've witnessed the zenith of global finance. 2006，the world total economic output was worth around $47 trillion, that's 47 followed by 12 zeroes, the total value of stock and bond markets was roughly $110 trillion, more than twice the size. And the amount outstanding of the strange new financial life form known as derivatives was $473 trillion, 10 times larger.’"

“We can intuitively understand that, in 2006 world, each people created material wealth to be plundered by more than 10 people.”

Now is 9 years later, the volume of overdeveloped financial economy will be much larger.

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1.3…Financial instruments are used to destroy world economy

Aug. 24, 2014, in the article, Over-heated real estate market is ruining Canadian economy from Japan mirroring Canada, I indicate that:

“People will never forget the 1997 Asian financial crisis that gripped much of East Asia and raised fears of a worldwide economic meltdown due to financial contagion.”

    “August 1997, in the article Currency "sabotage" should be an international crime, the writer Martin Khor said that:”

    “’Dr. Mahathir said he was disappointed that while certain people championed human rights, the same people allowed those like Soros to undermine the economies of not just countries but regions.’”

     "'We have worked 30 to 40 years to develop our countries to this level, but along comes a man with a few billion dollars and who in a period of just two weeks, has undone most of the work we have done. And as a result, the people of our countries suffer.’"

    "’The Prime Minister said there was much talk about human rights and the protection of people, but the public ‘must be protected from people like Soros who has so much money and so much power and is totally thoughtless because he is not only hurting the people of Myanmar but the poor people in Indonesia, Malaysia, the Philippines and Thailand. These people suffer because the cost of everything has gone up.’"  

“Many lessons lesson us that the financial instruments developed to today, have been powerful enough to achieve an effect as that of a strong military power cannot achieved. Especially, the rapid global mobility of financial capital that is just easily by playing fingers has been boosting such speculative activities.”

Until today, the currency speculation that has caused Asian financial crisis is still not under control. It is still in harming economy.

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1.4…Real estate is a kind of financial instrument in harming real economy 

In the article, Over-heated real estate market is ruining Canadian economy from Japan mirroring Canada, I also indicate that:

    “The real estate is a part of the real economy. However, it is a wand with opposite magic that either can benefit or harm to the economy. In the financial economy over developed today, in most cases, it harm to the economy.”

     “On one hand, due to the common sense of the real estate has a hedge against inflation with a better appreciation expectation, so people prefer real estate as a measure against currency devaluation. Therefore, it possesses the potential of attracting investment to drive the development of related industries to play a positive role in promoting economic development, even being taken as the indicator of the economic development.”

    “On other hand, the overheated investment on the real estate easily pushes up the housing and land prices, and thus to raise the operating cost of the industrial and commercial businesses, as well as the cost of people's daily life. Therefore, it possesses the potential of deteriorating economic environment to play a negative role of hindering economic development.”

    “As the result, in some extent, real estate has been used as a kind of predatory means to plunder on the real economy.”

    “If, we allow speculative real estate developing freely, in particular, the involvement of a large number of foreign hot money, is bound to damage the real economy as that of the hurricane to destroy living environment for the industrial and commercial enterprises and the life of the most of the locals.” 

“We should not forget the painful lessons that Japan's bubble economy in 1980s and the financial crisis 2008 are both speculative real estate related.”

“Due to the suitable living climate, political and economical stability of the Canadian-based, Vancouver City is favored by the real estate players. The negative impact of overheated real estate on the local economy is more and more prominent.”

“In the morning, Apr. 14, 2014, I read the article  <Foreign property buyers restrictions needed> and was moved by the rational views of Mr. Peter Ladner on the overheated Real Estate in Vancouver.”

“In Apr. 2011, he once told CBC News: ‘If our prices are being driven up by people who are simply investing in our community and not living here, there are a whole lot of problems that result.’"

“He worries that prices are forcing people raised in Metro Vancouver to move elsewhere and preventing others from moving to the area.”

“In the interview with David Berner on Shaw cable television, 25 May 2011,Peter Ladner said that:”

"I heard a story, a company wants to expand, they need workers, they cannot find them here, because all the young people here in somewhere else, because they cannot afford for living here. They hire people, recruit people from Toronto and other area, the people take one look at house price and they say that I cannot move here, so now the company in thinking about moving to Waterloo."

"We are declining the number of the companies in head offices in Vancouver. A survey on 60 CEOs about what keeps you from expanding and building the business here, the number one thing is the price of property, which is related. Number two is the shortage of skilled labors, which is also because of the housing cost."

"We also got the widening the Rich and Poor things, to disablize the society. And got cases were who move here, new immigrants, they want to move here work hard, make the way to get whole economic security, cannot happen."

     Video: Peter Ladner - Restrictions on Foreign Ownership

     https://www.youtube.com/watch?v=Z5SAgli5Yww 

     “Canada should be built as a place where the decent people can live a decent life through social wealth creation by their talent and hard work, rather than the fairyland for the speculative predators.”

1.5…The biggest social inequality is that rich individual with poor government 

In the article Canada Pension Plan must develop in kind base and as key body of state-owned economy I indicate that:

People hate social inequality and unfair with arguing that the Rich is too rich and the Poor is too poor. But, the tragedy that Greek Pensioner shoots himself to refuse to search for food in garbage revealed that:

“The biggest social inequality is that rich individual with poor government.”

“The biggest social unfair is that a society is in favor of individual rich while government poor.”

“The saddest tragedy is that government of a nation is too poor to provide basic life-support for their national.”

In viewing that in dealing with economic recession, the governments world widely have been continuing in the play the game of monetary quantitative easing and interest rates adjusting, with no actual action for restricting the wild development of the financial economy. We can speculate that the world economy will continue towards recession.

 2…The Supply-side economics will lead world economy recession further 

        The model of economy divides Demand side economics and Supply-side economics.

        Demand side economics is an outgrowth from Keynesian economics, which is contrary to accepted economic theories, a government ought to cut taxes and increase infrastructure spending with fiscal deficit during an economic downturn, and focus on increasing tax revenue during an economic upturn, which may result in an increase in the nominal wages of those who tend to spend the greatest portion of their income on consumables, which results in improved business income and grows the economy.

        Supply-side economics argues that economic growth can be most effectively created by investing in capital, and by lowering barriers on the production of goods and services, consumers will then benefit from a greater supply of goods and services at lower prices; furthermore, the investment and expansion of businesses will increase the demand for employees and therefore create jobs. Typical policy recommendations of supply-side economists are lower marginal tax rates and less government regulation.

 As my view, that Demand side economics is mainly investment in infrastructure and that Supply-side economics is mainly to create a good living environment for businesses’ operation.

 In comparison, though that investment in infrastructure may harmful for the long term economic development, but it really may play a quick role in stimulating economy. And that creates a good living environment for businesses’ operation will be conducive to long term economic development, however, it is a hard systematic process that needs a longer time and comprehensive social reform to achieve its positive role.

 In view of that the two big economies – the United States and China is both reviewing its economic development policies, which may lead economy from current Demand side economics turning to Supply-side economics. Especially, that China may put it into practice soon. We can speculate that the world economy will continue towards recession for a while.  

        2.1…Demand side economics is acting as economic heroin       

        The main part of demand side economics is the Fiscal Deficit.

 Feb. 16, 2014, in the article that Why German Economy Can Fly Against Economic Recession, I indicated that, the outstanding of German economy is from the outstanding of the national governance and corporate management.

“In last century, after the U.S. President Roosevelt successfully saved the Great Depression by the means of the government intervene in the economy, the most of countries take Keynesian theory, such as,Fiscal Deficit, as the magic to stimulate their economy. Now, most of them are debt-ridden, and some of them become losers with bared buttocks and broken spine.”

“However, at that time, rational Germans did not silly go with the flow. May be that they have foreseen that Keynesian Fiscal Deficit is the economic heroin with instant excitement, but long-term fatal. So, they adopts own Freiburg School neoliberal theory that can sustain for long-term stable development.”

“Now, nearly 80 years practices have shown that the choice of Germans was smart prescient.”

“Feb. 9, 2014, in the article The Fed's waning magic in the age of Yellen, the writer Edward Lucesaid that: ‘Every chairman of the US Federal Reserve seems to get hit by a crisis in their first year. Whatever might blindside Janet Yellen, she starts off with a problem that affected none of her predecessors: the Fed has run out of ammunition. Moreover the one remaining weapon the Fed thinks it has – the hocus-pocus of 'forward guidance' – is a gun that fires blanks.’"

“Many facts show that Fiscal Deficit is not only has lost its positive effect, but also has become economic heroin, and the addiction is quick growing in most of countries. Great many countries have become such drug addicts, if, stop using drugs, they certainly cannot stand. However, if, continue in drug use, destined to premature death. Now, Fiscal Deficit has become unbearable economic nuisance.”

“However, those are not the fault of the great Keynes, but the fault of the dogmatists of the policy makers due to they are too ignorance to make a rational judgment independently with a instinct that can only draw a tiger by copying home-cat, without ability for making a solution according to the actual objective situation in changing constantly.”

“As my view, one kind of medicine corresponds to one kind of disease, the disease has changed, and the good medicine may become deadly poison.”

“Nowadays, compared with that of formation period of Keynesian theory in before and after 1930s, the big changes in the economic structure, the large increase in the economic capacity, the over triple times increase in the population, and the bestial mad plunder of over-developed Financial Economy to the Real Economy, especially, the rapid free flow of the large amount of international hot money that large enough to destroy the economy of a nation, and the access is as easy as that of just a finger click.”

“International situation has undergone earth-shaking changes; however, the governments worldwide are still dogmatically continuing Keynesian economic theory that developed under old situation and certainly is not suitable for new problems.”   

2.2…It is not faulty of demand side economics but dogmatic politician 

Dec. 28, 2013, I once wrote article The Precious Legacy that Keynes Left to Us with a purpose to reverse confused ideology in economy. I excerpt some as follow.

Talking about Keynes, most people respect his The General Theory of Employment, Interest and Money1936. For instance, in 1999, Time magazine included Keynes in their list of the 100 most important and influential people of the 20th century with commenting that; "His radical idea that governments should spend money they don't have may have saved capitalism.”

But, I prefer The end of laissez-faire 1926, by which Keynes tries to reverse the ideological confusion.

"These many elements have contributed to the current intellectual bias, the mental make-up, the orthodoxy of the day. The compelling force of many of the original reasons has disappeared but, as usual, the vitality of the conclusions outlasts them.”

"To suggest social action for the public good to the City of London is like discussing the Origin of Species with a bishop sixty years ago. The first reaction is not intellectual, but moral. An orthodoxy is in question, and the more persuasive the arguments the graver the offence. Nevertheless, venturing into the den of the lethargic monster, at any rate I have traced his claims and pedigree so as to show that he has ruled over us rather by hereditary right than by personal merit.”

He knew that people accustomed to conservative in ideological is the major resistance for impacting on the progress of human society, so he continued:

"The next step forward must come, not from political agitation or premature experiments, but from thought. We need by an effort of the mind to elucidate our own feelings. At present our sympathy and our judgement are liable to be on different sides, which is a painful and paralysing state of mind. In the field of action reformers will not be successful until they can steadily pursue a clear and definite object with their intellects and their feelings in tune."

The way of his bold but sensible questioning about orthodoxy with advancing ideological could help us to advance the way of our thinking, and avoid to fall into the trap of dogmatism, it is the prerequisite to do anything correctly.

The world is in constantly developing, the objective conditions are constantly to be changed, and the nature of the problems will be changed, too. Only boldly breaking the restraints of old ideological frame, the horizons of vision is able to be expanded, the new innovative ideas can be find, the innovation is able coming true, so that, when facing new problems, we can quickly identify specific new solutions.

This the Precious Legacy that John Maynard Keynes Left to Us. 

2.3…Germans become savior for those victims of demand side economics 

In the article that Why German Economy Can Fly Against Economic Recession, I also indicate that:

“We are aware that, the Fiscal Deficit has caused the European Sovereign Debt Crisis, and theFreiburg School neoliberal theory helps industrious Germans playing a role as that of the savior for those European losers under Sovereign Debt Crisis.”

“Facing new social and economic issues, in 2003, Germans timely develop new solutionAgenda 2010 with aimed at reforming the German social system and labour market to improve economic growth and thus reduce unemployment.”

“Of course, Germans is success again with new economic miracle.”

“Mar. 19, 2012, Thomas Schulz published article 'We Need To Learn from Germany': How the German Economy Became a Model?”

“’It wasn't so long ago that many viewed Germany's economic model as outdated and the country as the "sick man of Europe." These days, however, even the Americans have come to praise parts of it, though they still doubt whether they would be able -- or willing -- to adopt it wholesale.’”

3…New Govt. Canada will be going on demand side economics 

The Throne Speech 2015 Delivered By Gov. gen. David Johnston indicates that “recognizing that public investment is needed to create and support economic growth, job creation and economic prosperity, the government will make significant new investments in public transit, green infrastructure, and social infrastructure.”

It is clear that new government of Canada will carry out  the Demand side economics, a economic policy that the U.S. and China are considering to abandon.

As my view, the new government seems to have not realized the fatal weaknesses of Canadian economy – extreme low productivity.

    4…The fatal weaknesses of Canadian economy – low productivity 

    Nov. 16, 2014, in the article Gregor Robertson a rational Mayor of Vancouver City, I have discussed the low productivity in Canada. I excerpt some as follow.

June 5, 2013, the article that A Canadian magic trick: wages that rise even if productivity doesn’t say with that:

“If you spend any time reading about the Canadian economy, you have inevitably come across the Great Canadian Productivity Puzzle. Canada’s productivity is much lower than that of other countries, and we don’t really know why. Neither do we seem to be able to fix the problem. Policymakers have used every trick in the book to try to boost productivity, but the results have disappointed.”

    “Canadian productivity growth has stagnated since at least 2002. You’d think Canadian incomes would also have stagnated, but they haven’t. There’s another piece that has to be added to the productivity-income puzzle.’

    “Canadian labor productivity growth has been lagging that in the U.S.”

  “Oct. 1, 2012, the article that Canada’s productivity lags U.S. in ‘virtually every instance': Deloitte said with that:”

    “Canada’s economy and ability to compete internationally is being hampered by its businesses’ inability to sustain growth over the long-term, says a report released Monday by consulting firm Deloitte.”

"The study shows Canada’s productivity lags behind that of the United States in “virtually every instance,” including those industries that have been the cornerstone of Canada’s economy for decades — mining, oil and gas, financial services and manufacturing. The manufacturing sector was called out as a particularly poor performer, noting that U.S. productivity in the manufacturing has grown at a rate six times faster than that of Canada since 2000.”

4.1…German immigrant was shocked by lax office culture of Canada 

    Followed the Oct. 1, 2012 article that Canada’s productivity lags U.S. in ‘virtually every instance': Deloitte, there is a comment that seems touched the true nature of low productivity in Canada.

Bernard comment in 2 years ago: “being an immigrant from Germany I can tell you my perspective of lacking productivity in Canada: looking around in the office I see people dropping in sometimes between 9 and 10 am. Not much later they are off for a coffee break. Then there is lunch break and another coffee break. Leaving around 4pm, because there is some important fishing or hunting or other outdoor stuff on the agenda.”

“Any more questions about productivity?”

“I mean, I really appreciate work-life balance. But what I experience is overdone.”

    My disappointing experience on lax work in government agency. 

    After read above comment, I think of a few years ago in Toronto, a government agency; there a lot of people were waiting in line. From the perspective of the number of idle chairs in office, there should be a lot of people who were work here, but only there two staff were servicing for the customers. There are other two staff finally came, the people who were waiting in line were pleased for that was able to speed up. However, the two came-in staff has not sat down yet; the original two staff in working immediately got up and left away.

Long time waits in the government agencies seems a common matter in Canada, which is not due to short in manpower, but only due to the poor work ethic.

The government agencies are the part of the State Apparatus, we have enough reason to question that such a State Apparatus is in properly running?

     4.2. Wrongful social governance causes low productivity 

     In Jun. 25, 2013, article that My view on Entrepreneur and Enterprise inspired by Peter Shoore, I discussed this issue. I excerpt some as follow.

    The Entrepreneurs run Enterprises to create job position for citizen livehood-making and revenue for social governing, from this point of view, the Entrepreneurs are the best civil servants, and the communists in reality.

    However, historically, in worldwide, it has been lacking of concerning and supporting for Entrepreneurs, even, until now, there great many people are with hostile attitude toward them. The law seems to have ignored this group also, but tended to protect employees without updating of the outdated concept from the times of Industrial Revolution with ignoring that modern society has provided thoughtful social welfare and comprehensive legal protection.

The outdated ideology and practice has badly affected the work ethic of employees and to have made Enterprises difficult for managing, even, encouraging some mindless employees' pranks boldly in the workplace without the fear of being punished. It not only badly affecting the production efficiency, but more terrible, it even caused the closure of some Enterprises.

4.3…It is that poor management causes businesses decline 

     For the economic downturn in Canada, many social elite, even most of officials are over-emphasizing the macroeconomic environment, while ignoring the main economic microscopic cells - business survival.

     In fact, there many businesses with good products and stable customers were closed only due to poor management without direct relation with macroeconomic environment at all. 

     I have been concerning about the economic issues of Canada. In the past 13 years I intended work in different type of enterprises of Canada with a terrible experiences that most of them were poor managed, and even shrouding with absurd ideological with poor corporate culture, some employees, even some management personnel are lack of the sense of responsibility, and even makes vandalism in workplace, they boldly make nonsense without worry about being punished. It is not only resulting in production inefficiency, but also caused many enterprises' closure.