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Did Globalization Cause the Brexit?

by John Brian Shannon | July 3, 2016

“The measure of a society is found in how they treat their weakest and most helpless citizens.” — former President of the United States, Jimmy Carter

And in the UK, the vote on that was June 23rd. The result is there for all the world to see.

Had a mentally disturbed man not gunned down MP Jo Cox, the Brexit win might’ve been 70 percent.

Regardless, 52 percent of Britons said EU membership isn’t working for them, in one way or another.

And this is the whole point; If you’re a 1-percenter or an elite, the EU is a truly wonderful place to live. I’d have to call it an almost ‘unparalleled’ existence, living in historic Europe, beautiful Europe, a continent full of amazing cultures and such technological prowess and so much more(!) that it would take a year-long video presentation just to cover the basics.

But if you’re a ‘working stiff’ in the EU, it’s not so good.

OF COURSE, the economic problems in the EU and other Western nations, are globalization-induced. It’s so apparent it’s beyond all argument.

Fully half of the Brexiters angst could be traced or blamed on the follow-on effects of globalization.

That doesn’t give the EU governance architecture a ‘free pass’ however — on the contrary — the EU is one of the main ‘pushers’ of the globalization drug, and with that (good) drug come the (negative) side-effects;

Which are; the offshoring of jobs, higher unemployment, more competition for jobs, massive immigration / ghettoization, higher crime rates, higher societal costs (including, but not limited to; policing, court, incarceration, property damage, and intangibles like ‘how safe’ citizens feel in their own city) also higher traffic flows in airports / shipping ports / highways / and in cities — all of which suddenly require massive upgrades to handle the increased traffic. And so much more than that short list.

I’m the first to agree that the thing we call globalization is a truly wonderful and great thing! But the job is only half-done.

Globalization has created a permanent class of poor people (whose jobs were shipped to Asia, and many remaining jobs were taken by economic immigrants) a situation which has yet to be properly addressed in the EU.

When a society isn’t working for 2/5ths of the citizens, it isn’t working. Period. Full stop. Until the day it’s rectified.

And that’s what I’m hoping for. I’m waiting for the mandarins in Brussels (who can’t be fired by ‘The People’ because they’re unelected) to begin to address the shortcomings of their governance architecture — of which globalization is a major platform.

They should’ve been proactive all along, instead of spending hundreds of thousands of person-hours on what ingredients bread may, or may not have. (How ‘Soviet’ of them) I hear they’re working on the rules for shoe factories next week.

It’s difficult to believe that some people can’t understand how Britons could vote for Brexit.

  • Either the EU must begin holding EU-wide elections for their highest officials (to allow ‘The People’ a chance to ‘vent’ when things aren’t going well) instead of choosing to ‘_exit’ the EU,
  • OR
  • the unelected mandarins must begin to address the negative aspects of globalization for the bottom two economic quintiles (2/5ths) of the EU’s citizenry.

Otherwise, the whole thing will eventually fail — with nations continuing to join the EU, but with more leaving than joining.

Were a similar referendum to the UK referendum held in every EU nation next week, I’d expect that 52 percent (or more) of EU citizens would vote to ‘_exit’ the European Union.

And that would be a crying shame. But it wouldn’t stop it from occurring.

There are few who support the European project as sincerely as I, but there comes a time when we must be candid about successes (many) and failures (only two; But causing two other failures, for a grand total of four failures) and with more failures likely.

The failure to address the;
(1) negative aspects of globalization, is caused by;
(2) a democratic deficit in Brussels, which caused;
(3) Swiss citizens to reject EU membership in 2014, and;
(4) British citizens to Brexit in 2016.

Stay tuned for more such failures — and all of it will be on account of the democratic deficit of the eurocrats in Brussels and their failure to address the negative aspects of globalization.

Related Article:

Are the Winds of Change Blowing Across Canada’s Pension Plan?

by John Brian Shannon | June 2, 2016

Canada Flag made with red maple leaves on snow1

Canada Flag made with red maple leaves on snow.

The Canada Pension Plan (CPP) is at a unique point in its history. Mandatory for all Canadians, the CPP allows working Canadians to retire with a minimum income in addition to their company pensions, life savings and real estate equity.

The plan itself is in good financial shape due to sound institutional investing over many decades and it presently earns 1.1% more than it needs in order to meet all foreseen liabilities.

But that could change.

A severe recession could drive the plan into negative territory, necessitating a rise in the premiums that workers and employers pay — without making any changes to the benefits that retirees receive from the Canadian Pension Plan.

Alternatively, during a severe recession the government could simply lower the monthly benefit payment by a fractional amount in order to keep the CPP fully-funded — without making any changes to the premiums that workers and employers pay to fund the Canadian Pension Plan.

So, with a bit of wind in the sails (but not that much) why are we looking at possible changes to the CPP?

1) There is a minor political suggestion to take advantage of the 1 percent profit the plan presently generates and lower CPP premiums by some fraction. It looks like honest stewardship of public accounts on the part of the government.

However, by reducing worker and employer contributions the plan could soon find itself in jeopardy during an economic downturn and at the worst possible moment for Canadian workers and business it would need to raise premiums to meet future liabilities.

It’s a nice idea and if the investment was generating 10 percent or 20 percent more than its expected future liabilities, it might be worth a look. But it’s not. So let’s file that suggestion until such times as the CPP investment pool is earning outrageous profit and workers demand lower premiums.

2) Another suggestion that has been floated, and that is to slightly increase CPP premiums in order to increase the monthly benefit (the payment) which is paid to Canada’s senior citizens. In such cases, the benefit would increase after a minimum 3-year delay in order to ‘build-up’ enough capital to cover the increased benefit amount.

Which is a tempting idea, actually. The costs of living anywhere, but especially in cities like Vancouver, Toronto and Montreal are skyrocketing, and senior citizens who live on a fixed income might find that an extra $100. per month (for example) can make the difference between eating well and paying for their herbal supplements, walkers, or other health-based assists that may be helping them, or not being able to afford them.

As the cost of living continues to rise over the decades, shouldn’t we at least think about increasing the CPP premiums by 1 percent that workers and employers pay? After all, eventually every one of us will retire and some or much of our retirement income may come from CPP.

Those retirees without company pensions, significant savings or real estate holdings, would really benefit from the extra monthly benefit amount, while those who are financially well-off may reject the idea that they should pay an extra 1 percent towards their CPP payroll deductions during their working years.

It’s an absolute no-brainer for those in the bottom two economic quintiles while those in the top three quintiles may scoff at the suggestion that a (for example) 1 percent premium increase which would result in higher monthly benefit amounts paid to them after their retirement, needs to be legislated into existence.

3) The third suggestion is for provincial pension plans that work in conjunction with CPP, the federal retirement plan. Quebec has its own plan, Ontario has just passed its own plan and other provinces are watching with interest.

Province Passes Ontario Retirement Pension Plan Act – June 1, 2016

Strengthening the retirement income system is critical to the future prosperity of the province. Studies show that many of today’s workers are not saving enough to maintain their standard of living in retirement. Pension coverage is also low for many Ontarians, with only one in four younger workers — aged 25 to 34 — participating in a workplace pension plan. — Province of Ontario | Newsroom

For retired people who have lived in the bottom 2 quintiles for most of their life and may not have a generous company pension, or do not have significant life savings, or do not have valuable real estate holdings that they can liquidate in order to live a fulfilling life, receiving a provincial monthly benefit in addition to Canada’s CPP benefit would dramatically improve their retirement.

It’s not such a big step as some may imagine. Provinces and the federal government charge and collect sales taxes, both levels of government have their own income tax system, and in many ways both the feds and the provinces work together to assure the health and safety of Canadians.

All that needs to be done is to write the necessary legislation (or simply photocopy Ontario’s system) and enact it in each province.

While retirees may not end up receiving two identical monthly benefit payments, even an extra (for example) $500. per month from a provincial pension plan, when coupled to their CPP pension monthly benefit payment, can make all the difference in the world to tomorrows retirees. Especially for seniors whose life partner (and co-payer) has passed away, an extra monthly payment can really make a difference in their lives.

4) Finally, no matter which way it goes with regards to the above points #1, #2, and #3, I hope federal government policymakers take this next suggestion seriously…

During retirement years it is expected that one spouse will pass away before the other — leaving the other to not only grieve, but to also suddenly face a major change in their monthly income.

I respectfully suggest that CPP legislation be changed to ease the suffering of suddenly widowed pensioners by allowing their (deceased) spouse’ normal monthly benefit payments to continue for a full 12 months following the death of their spouse.

That way, the remaining spouse won’t have to face both bereavement and a possible address change due to the sudden drop in income.

Canada could show that courtesy to recently bereaved pensioners now — and it wouldn’t even cost .1 percent — let alone a full 1 percent of the profit that the CPP investment pool presently generates.

We are indeed fortunate to live in this great country, and looking after our senior citizens — the very people who helped to build this great land into what it is today, should always be our first priority.

Let’s always treat our Canadian seniors with the kind consideration they deserve. They’ve earned it.

Recommended Reading:

Bonus Graphic:

Canada Pension Plan (CPP)

Canada Pension Plan (CPP) policymakers must factor-in global trends.


International Free Trade Agreements: Blessing and Curse

by John Brian Shannon | October 13, 2014

International free trade deals are the sexy new thing for world governments.

From the U.S. and Canada, to Europe, China and Japan, trade negotiations are taking place with the goal of lowering barriers to international trade and thereby increasing economic growth. Which could be reasonably argued, is a very good thing.

But as is often the case, the devil is in the details.

TTIP protest in London, UK

Trans-Atlantic Trade and Investment Partnership (TTIP) protest in London, UK October 2014. Image courtesy of AP

Few people have trouble with free trade agreements that are negotiated in good faith and which serve our national interest by lowering the price of goods for consumers — while simultaneously increasing our ability to profitably export to other nations.

In principle, this is a fine idea in a world that’s rapidly becoming smaller. The essence of free trade is so logical, so timely, it’s difficult to argue against it.

Yet TPP and TTIP appear to be one-sided

The problem isn’t that China has better negotiators than Canada. Nor is it that the Americans are more skilled negotiators than the EU negotiators. Nor is it any bloc gaining unfair advantage against any other country or bloc.

What has occurred is that multinational corporations will gain generous clauses, stacking the deck in favour of corporations, so as to infringe on the sovereignty of nations and the rights of citizens and workers.

These unprecedented privileges afforded to corporations will help corporations exert veiled or overt control over our governments, our defence establishment, and on citizens and workers. It’s so prone to abuse that it will get worse over time, no doubt about it.

We didn’t elect our politicians to hand the keys of the country to foreign corporations

If TPP and it’s cousin the TTIP aren’t fixed soon, nations will have surrendered much hard-won sovereignty to the often faceless, ever-changing, and unelected executives of the world’s multinationals. Nations which lost hundreds of thousands of soldiers and citizens in WWI, WWII, the Cold War, the Korean War, the Viet Nam War and other 20th-century wars will have handed over much of what we and they have paid dearly for… to unaccountable and (sometimes) foreign corporations.

We fought those wars to guarantee our sovereignty and we won. Shall we now hand our winnings to multinational corporations?

Not that I have anything against corporations. They’re a part of our modern world. Without them, we’d live with much-reduced technology, less convenience, and every jurisdiction would need their own butcher, baker, and candlestick maker — and everything else for that matter.

Not to mention that each local auto dealership would need a tiny manufacturing plant out back, where each car would be built on a per order basis. Your car would cost $100,000 and take two weeks to build, and you would have to pay for it in cash, and in advance, without multinational auto manufacturers and multinational banks, and reliability might not be as stellar as today’s mass produced cars.

Similar would be the case for your cellphone, computer, home appliances, etc. (You’d need to pay in advance, and those things would be built and warranted by a local manufacturer, non-uniform quality might be a problem, and higher and non-uniform pricing would be a national irritant)

Without multinational corporations it’s safe to say that prices would rise and some goods may not be profitable in some markets. Meaning; Not available

Would northerner’s have fresh lettuce in the winter months without multinationals?

Maybe, but growing produce in northern greenhouses in the winter months is more costly than growing vast quantities of it in the south and then shipping it north.

The benefit of large-scale production that only multinationals can manage is that lower and more uniform pricing is the result. Aside from exchange rates, the price and quality of lettuce is pretty much the same across North America due to the large-scale production and shipping methods of agricultural and transportation multinationals.

We survived for thousands of years without multinational corporations and we could do so again if the need arose. They’re not as indispensable as they would like us to believe. Some countries operate without them or have only limited interaction with them.

But they do allow us more variety in the marketplace, lower and more uniform prices, uniform levels of quality, access to financing via multinational banking syndicates and year-round agricultural products.

So, mostly good. Until they try to take our countries on the sly

One of the major definitions of sovereignty is that nation-states have the right to create and pass legislation pertinent to their country.

In Canada, the country I live in, it has historically been the right of various levels of government to pass laws governing the actions of people, corporations, and of the government itself. Here, there are three levels of government, federal, provincial and municipal and most nations have parallel arrangements.

Notice the part where I mentioned the government can pass laws to regulate corporations?

In Canada, corporations can be regulated by three different levels of government. Which is a hassle for corporations as they must occasionally meet the regulations of all three levels of government. This is to protect the rights of citizens and workers.

Let’s say that I live in a small town and a large corporation wants to build a nuclear power plant next door. They want to buy many of the homes in the neighbourhood, tear them down, and install a nuclear power plant thirty feet from where I live.

They can’t do that in Canada because this is a developed nation and Canadian citizens have rights. All three levels of government would come together to stop such a plan from getting past the drawing board.

If you live in a developed nation, your town or city would likewise intervene if a corporation tried such a stunt. The government works for the people to prevent inappropriate development from occurring. Just one of the benefits of living in a developed nation.

But with the proposed free trade agreements governments will get sued by corporations for passing new laws or changing existing laws and regulations that could impact their operations. There is no legislation preventing the most frivolous of cases being brought against any level of government. Nor is there any limit to how many court cases (frivolous, or not) that corporations can bring against the government.

A profound change is about to hit our civilization — in ways we can’t yet imagine

Whether the corporations win every court battle or not may be completely irrelevant. If you represent a corporation you can choose to tie up the court system with challenges to new or changing laws — or merely threaten to tie up the court system with legal challenges. And of course, corporations can be quite active in the media with some owning entire media chains.

All of this could leave government employees (both elected and civil servants) afraid to do their jobs in case they, or their department, get sued by a foreign multinational corporation. Which has already happened.

At that point, we no longer live in a democracy

Hundreds of thousands of valiant men and women died in wars and in conflicts to defend our rights and freedoms. And they didn’t make the ultimate sacrifice so that neophyte trade negotiators or accomplices of the multinationals (choose your terminology) could hand over those hard-won rights and freedoms to a (possibly foreign-based) corporation.

It’s completely normal for corporations to want to diminish the power of governments as this gives them more latitude to operate and may increase profits.

The question is; Should we give them unique levers of power over our elected governments? Levers that citizens don’t have!

Again, it’s not that corporations are evil. It’s not that the people running corporations are evil. But corporations are in business to profit their shareholders, wherever those shareholders live in the world.

They’re not in business for the citizens nor should they pretend to be. Their industry is what matters to them, consequently, they have their own agendas which can conflict with national sovereignty, with the democratic rights of free people, with civil rights of citizens and worker rights.

Benito Mussolini created the word ‘fascism.’

He defined it as ‘the merging of the state and the corporation.’ He also said a more accurate word would be ‘corporatism.’

This was the definition in Webster’s up until 1987 when a corporation bought Webster’s and changed it to exclude any mention of corporations. — Adam McKay

See what I mean?

Corporations aren’t in business for us! They’re in business to make a profit for their shareholders — and while that’s not a bad thing — it can conflict with the role of governments, with the rights of citizens, and of workers.

Conversely, governments exist to protect national sovereignty, democratic rights, the civil rights of their citizens, and worker rights.

Cut to today’s Western economies…

The corporations don’t have to lobby the government anymore. They are the government. — Jim Hightower

Handing-off our hard-won rights and freedoms to corporations will not increase our rights and freedoms, nor does it strengthen our democracy — no matter what corporate spin is put on it.

We elect our leaders to guide and protect us from threats to our society. CEO’s of foreign corporations are not elected by our citizens, are not accountable to us, cannot be removed from office at elections, and can be faceless people moving among us, yet may soon have more power over us than the people we elect to protect our interests!

Not only that, but CEO’s tend to be nomadic by nature. If one CEO gets too much heat due to a particular policy or an unpopular project, they simply leave that corporation to become a CEO somewhere else — leaving the whole mess behind with little in the way of personal punishment.

Did firing the CEO of Exxon magically fix the Exxon Valdez oil spill? No. Did firing the CEO of BP magically fix the blowout in the Gulf of Mexico? Of course not. Did firing the CEO’s of major financial institutions in 2008 magically repair that damage to the economy and to the financial situation of millions of people? No.

All of them walked away from those situations and were simply hired somewhere else after a short vacation in some exotic locale. Not what you’d expect, yet it’s a common practice.

I’ll bet you can’t even remember the names of those CEO’s

If you or I commit gross errors or outright frauds which later cause untold economic or environmental damage we’d go to prison for life.

But if you’re a CEO, you get fired and you pick up your multimillion dollar bonus before you leave town on your way to a nice vacation spot. Then you settle in as a CEO of a corporation down the street from your old office. Just like that. See? No problem. Except for the truth that he or she might have destroyed the environment, or the economy, or people’s livelihoods — or all three.

In Andrew Jackson’s time 1767-1845, we were warned about the dangers of corporatism

Unless you become more watchful in your states and check the spirit of monopoly and thirst for exclusive privileges you will in the end find that… the control over your dearest interests has passed into the hands of these corporations. — Andrew Jackson
I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country. — Thomas Jefferson

Both Andrew Jackson and Thomas Jefferson worried about too much power concentrated in the hands of too few industrialists, which is exactly what played out in the former Soviet Union — is now a concern in the West today — and was well expressed by such groups as the Occupy movement.

Cut to modern America…

Multinational corporations do control. They control the politicians. They control the media. They control the pattern of consumption, entertainment, thinking. They’re destroying the planet and laying the foundation for violent outbursts and racial division. — Governor Jerry Brown
If our elected leaders and their negotiators fail us, it could eventually change everything about our way of life. Whether they do it in cahoots with multinational corporations or will be outclassed in negotiations remains to be seen.

That’s almost irrelevant, however. What really matters is preventing corporations from unduly influencing elected politicians and civil servants so that our democracies become permanently stuck under the corporate thumb, our citizen rights and worker rights become weakened, and citizens and governments alike become mere extensions of multinational corporations.

That isn’t what millions fought and died for.