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G20 Hamburg: An Opportunity to Share Success, or End of the Established Order?

by John Brian Shannon

There are many things in the economic and political world that are going ‘right’ at the present time and there are many things going ‘wrong’ and depending upon where you are in the world, you see the glass as half-full or half-empty.

Where you are financially… likely determines your views on economics and politics.

In the colonial and postwar eras, if you were happy and supportive of democracy it’s because you lived in a thriving economy in the West or Japan  — and if you were unhappy you lived in a colonial or post-colonial nation with a ‘frontier’ economy, which is to say, you were dirt poor and local warlords were more powerful than your own government.

However, that’s changing.


Globalization Changed the World

Especially since the advent of globalization 2.0 (FYI: globalization 2.0 began in 1974 with the creation of the Petrodollar) wealth shifted from industrialized nations to developing nations along with millions of jobs that were offshored in the pursuit of higher profits for Western corporations — profits which were then distributed among relatively small numbers of rich shareholders.

Over many years this caused wealth to ‘trickle upwards’ and is responsible for the creation of the 1 percent economic class.

Consequently, in America (which always has reliable stats) the 1 percent in that country enjoy more wealth than the bottom 80 percent combined!

Here’s a nice, short video that demonstrates this; Keep in mind, this video was made in 2009. Things are much worse now… and people wonder why political change occurs?

The total wealth of the United States was 54 Trillion dollars in 2009. Let’s see how it was distributed…

As long as we keep in mind that things are getting more dire each year, that will about cover inequality in America and explain the recent and major political changes there — with surely more change to come.


Growing Inequality Isn’t Being Addressed

Inequality is even worse globally. Although different in absolute numbers than America’s situation, the disparity between rich and poor is even greater.

Even today, 71 percent of the world’s population exist on less than $10 per day and 9 million per year die of starvation and a lack of clean drinking water.

That’s Failure by Any Standard!


All the good work by NGO’s over decades of time aside, it’s a catastrophic indictment of our entire civilization. It seems to be a case of; ‘We can do better, we just can’t be bothered’.

To illustrate the disparity that remains in the world let’s look at the present trend, lest you think world leaders are doing anything to solve the problem.

Share of the world's total wealth for the Top 1 percent and the Bottom 99 percent. Image courtesy of OXFAM.

Share of the world’s total wealth for the Top 1 percent and the Bottom 99 percent. Image courtesy of OXFAM.

It’s pretty clear this is the Number One problem in our century and that it isn’t going to be solved at the G20 Hamburg summit. And if the 20 most powerful nations on Earth can’t solve it year-after-year (look again at the trendline) then it isn’t going to be solved.

I think it’s a pretty safe bet that it isn’t ever going to be solved.


Therefore, Let’s Be Realistic and Deal With the Symptoms

Now that we’ve ‘gone realistic’ we can settle ourselves down and figure out a way to compensate the ‘losers’ of globalization, which used to be the bottom two economic quintiles in each developed nation but are increasingly the bottom three economic quintiles. Yes, the middle class is being hollowed-out and sooner than you think there won’t be a middle class.

(You know, the middle class? The group that was mainly responsible for paying for most of the infrastructure built in the postwar era and for paying many of the entitlements enjoyed by developed nation citizens)

Fortunately, it’s an easy fix.


In the next 10 years, one-in-every-eight jobs will be lost in developed nations to technology — whether robots on assembly lines, or computers or other technologies, it’s happening now. In some ways those jobs are already gone.

With the flick of a wrist, corporations could accelerate their Automation / Mechanization / Computerization (AMC) program and do it over the next 40 months instead of the next 10 years. That’s a very sobering thought.

politics tag, Statista chart -- Technological advances replace old jobs at risk.

“According to Bruegel, the impact of new technology on old areas of employment is set to become increasingly important in the long run. It has already shaped labor markets in the past and will continue to do so in the future, especially in Europe. Bruegel defines computerisation as a job that is “potentially automatable over some unspecified number of years, perhaps a decade or two” and they have predicted the likelihood of this occurring in the EU. “Niall McCarthy

(Side-story on the graphic: In the European example, all the countries in red and orange are countries where technology is replacing traditional labour jobs. But those newly-unemployed workers simply travel to London or Paris and take jobs from the workers there because they are willing to work for lower wages. Which increases unemployment and welfare rates in London and Paris. You see? Nothing happens in a vacuum. It’s all connected)


If AMC adoption were to suddenly increase

Of course, GDP would leap forward, corporations would make astonishing profits, relatively small numbers of Western shareholders would reap even more dividends further enriching the 1 percent, and developed nation corporations would have the ability to better compete with developing economies.

It won’t solve the problem of the 1 percent sucking up all the wealth because as U.S. and European corporations make larger profits, the 1 percent will receive higher dividends.

But the ‘losers’ of globalization — ‘the shrinking middle class’ that are rapidly becoming members of the fourth and fifth economic quintiles — can be compensated.


Compensating the Hollowed-out Middle Class

Why should they be compensated? Because developed nation governments allowed millions of jobs to be given to developing nations (via legislative inaction) when corporations began to offshore jobs in significant numbers in the 1970’s.

But we can solve it now, exactly as President Nixon predicted (and tried to do while in office) by instituting a 5 percent tax on every robot and job-stealing mechanized device based solely on the value of the work performed (just like an income tax on individuals) to fund a Guaranteed Basic Income (GBI) for unemployed adults.


What do Smart People like Bill Gates say?

Smart people like Bill Gates are also calling for this plan, and one of the best reasons for it is to maintain social cohesion so that we don’t lose our country (via revolution) in the mad dash by small numbers of corporate shareholders for larger dividends.

The GBI would replace ALL social welfare programs, many of which are duplicated at the federal and state levels, some cities have additional income schemes that exist concomitant with other levels of government. In many cases there is duplication and even benefit fraud via intimidation of the people who run those small-scale city programs.

Every adult citizen in America (to use the U.S. for an example) that is unemployed would receive $1088 per month — but only once they exhausted their unemployment insurance benefits. As America is a nation of workers it’s safe to assume that they would still be working if their jobs weren’t already offshored by greedy U.S. corporations and their shareholders.

Also, every retired person who is trying to live on less than $1088 per month would have their monthly income topped-up to $1088 per month via the GBI program. (Just put low income pensioners on the GBI and be done with it)

It isn’t enough to get rich on! But it is enough to live on at a very basic level and allow unemployed adults to stay ready for any job opportunity that may appear.

The bonus here is that local shopkeepers would love it as every cent would be spent on groceries and medicine, on clothing and haircuts for job interviews, and to pay for phone/rent/internet access. The GBI’s secret is that it would be a real boon to local economies!

In the UK, the amount could be set at £1088 per month, while EU countries could set their GBI at €1088 per month.


Tax the Robots!

It’s so simple to fix the vast inequalities that are getting worse with each passing year. TAX THE ROBOTS!

And cancel the many overlapping, inefficient, and abuse-prone welfare programs by turning them into one automated program that pays every unemployed adult $1088 per month (after they have exhausted their unemployment insurance benefits) and to top-up the monthly income of pensioners to $1088 per month.

It’s so simple, even a politician could do it!


Keep Workers Viable Until Needed for the U.S. $1 Trillion National Infrastructure Program

All G20 countries could enact a similar policy. Keep your former workers alive and viable (who after all, are only ‘former’ workers since millions of their jobs were offshored by corporations with their government’s approval) by using a GBI and they will be ready and willing to return to work — a different kind of work than manufacturing, but still, paid work — where they can be part of a great national infrastructure renewal program lasting at least one decade.

Most developed nations are at the stage where Generation I and Generation II infrastructure needs replacement and upgrade. It isn’t glamorous, but it is ultra-important. By the time that’s accomplished, Gen III infrastructure will be needing upgrades or outright replacement. See how that works? See all the people working on national and state/city infrastructure projects? Yes, working people are not unemployed people. It’s so simple.

Tax the robots, pay the GBI to unemployed adults, and rebuild and upgrade the national infrastructure — all paid for by a nominal tax on robots and other job-stealing devices. Now that’s a plan that benefits everyone!


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How Canada Could Excel at COP 21

by John Brian Shannon | November 8, 2015

Canada could contribute to the COP 21 success story with a straightforward move towards cleaner and renewable energy

Canada could contribute to a COP 21 success with a move towards renewable energy and hit a home-run in the process. File photo: COP 21 logo

Canada could contribute to a COP 21 success with a move towards renewable energy and hit a home-run in the process. File photo: COP 21 Paris logo

As a country that already sources 80% of its electricity demand from clean or renewable energy (mostly via hydro-electric power and nuclear power) it would be slam-dunk-simple to convert the remaining 20% of the country’s national electricity grid to a combination of cleaner and renewable energy over a period of 10 years.

If the promising and newly-elected government of Canada — headed by Prime Minister Justin Trudeau, and assisted by Natural Resources Minister James Carr, and Environment and Climate Change Minister Catherine McKenna — followed the plan presented below, Canada could hit an easy home-run on the climate change file.

Remember, Canada already produces 80% of its electricity via clean or renewable energy. It only needs to succeed on cleaning up the remaining 20% of its power generation. Slam. Dunk. Simple.

  1. SLAM. Write legislation to ban the burning of coal within Canada by 2020.
    BAM! We win. Canada is a renewable energy superstar and the talk of COP 21.

    Canada can simply export that much more coal.
  2. DUNK. Of course, the country can’t do without that 20% of primary power generation — most of which is coal-fired. Therefore, those coal-fired power plants must convert to natural gas by 2020.
    This has been done by many utility companies in the U.S. and is a mature and thriving industry.
    And whatever coal plants are too decrepit to convert to natural gas; Decommission them as part of the national energy infrastructure spending programme and replace them with true Hybrid power plants — where solar, wind, biomass and natural gas-fired electricity generators combine their various strengths to provide the same or more electricity than the decommissioned coal power plants they replace.
  3. SIMPLE. Direct the national energy infrastructure spending towards the goal of complete Canadian energy security, creating many construction and permanent jobs here in Canada.
    We accomplish this by building the Energy East pipeline — but with a change-up to twin pipes.

FYI — Canada’s crude oil has always been mixed with Saudi #2 (sweet) or Saudi #3 (semi-sweet) or Texas #3 (semi-sweet, a.k.a. Texas Intermediate) crude oil, in order to be clean enough to pass through the oil refinery without damaging the equipment.
Canadian crude oil barely registers #4 (sour) and is so corrosive that refineries refuse to refine it unless it is first diluted with liberal amounts of Saudi or Texas crude oil.
We need a twin-pipe system; One pipe to distribute the #2 or #3 crude oil (for dilution purposes) and the other pipe to carry our #4 crude oil to the refineries.
The Energy East pipeline should traverse all of the provinces and continue west into northeastern British Columbia, terminating in Yukon.

Why? To make Canada 100% energy self-sufficient.

As part of the national energy infrastructure spending programme, we should tender the construction of one oil refinery in each Canadian province appropriately-sized to the needs of that particular province with an additional 25% capacity built-in from day one.
That additional capacity helps to defray the cost of such refineries (via surplus finished oil product exports) and further, provides additional refining capacity in later years as Canada’s energy demand increases.
Like the huge water desalination plants in the Middle East, oil refineries require monstrous amounts of electricity to power them. Which is why we need Hybrid power plant installations near such refineries as part of our national energy infrastructure programme.

In the 21st century, it’s no longer all about being oil (only) or gas (only) energy companies or raw resource exporters. It’s all about being energy companies — that is, companies that meet the energy demand of their customers with many types of energy.

Some would say more appropriate energy.

What are the benefits?

Canada would hit an easy home-run in Paris at COP 21.

Canada would be seen as an important partner at COP 21, as one of the countries helping to drive momentum towards a cleaner global energy paradigm. (After COP 21, countries are going to be treated as ‘Part of the Solution’ or ‘Part of the Problem’ depending upon their contribution or lack thereof, to combat climate change and help improve air quality in cities)

The country would easily surpass the Kyoto clean air standards that it failed to meet by opting-out of that agreement. ‘Shamefully failed to meet’ it must be said.

It would create 100% energy self-sufficiency for Canada (yes, we would still need to buy sweet Saudi or Texas crude oil to mix with our incredibly sour crude oil, but we would then export more refined oil product to other countries than we would buy) and thereby stabilize our transportation energy market in a massive way.

Thousands of construction jobs would be created to build the (twin pipe) Energy East pipeline, to build each provincial oil refinery, and to ramp-up the distribution network in Canada to deliver the domestically produced end products of our crude oil.

Canada would ‘value add’ to the energy it extracts from the ground and instead of being the historical ‘hewers of wood and drawers of water’ that we’ve always been, we could be energy independent while improving the domestic supply chain and the even more important value chain. Value added resource extraction. Now there’s a thought!

It’s so obvious that Canada should do this and it already has such huge support across the country, that even if gasoline were to cost 1% more at the pumps (for example) Canadians of all political stripes would flock to support it.

And the time to do it is now. If a Republican president is elected in the U.S.A. in 2016, the new president could conceivably ‘pull out all the stops’ to prevent Canada’s energy independence from occurring before it ever gets started.

If Canada is a ‘real country’ then we need to act boldly and cut the energy apron strings from Momma America. (Don’t get me wrong, I love the Americans. But Canada must do what’s best for Canada and not be found to be working for a tiny number of (1%’er) Republicans in the United States)

It is time for Canada to step up to meet the challenges of our time, as previous Canadian leaders have met the challenges of their time. And this one should be an easy slam-dunk for Canada. All it takes, is the will to act.

The question is; “Does Canada have the right Prime Minister, the right Natural Resources Minister, and the right Environment and Climate Change Minister to make this a reality?”

My own sense is that the Trudeau government is ‘bigger’ than the problems Canada faces.

We’ll know by December 12, 2015. Talk to you then…