Thursday, February 5, 2009

More Budget. He stuck in his thumb, and pulled out a plum..

and said, "What a smart boy am I!"

The Automotive Industry

Phew! This one's a whopper. It really doesn't look like the Government knows what is going on here or what will happen anymore than the rest of us do. They seem to be talking more broad strokes as they want to deal with everything from available credit to consumers to buy more new shiny things, to offering up assistance to parts manufacturers etc.

Considering the timing of rumors coming from the CAW about GM possibly pulling out of Canada altogether and references in the budget to offering assistance to other sectors of the Auto Industry, GM may not be pleased with it's prospects.

Considering the following section, one has to wonder about some flags;

"In addition, the Government will create the $12-billion Canadian Secured Credit Facility, announced earlier in this chapter. This facility will improve credit availability for consumers to purchase and lease new vehicles."

I am wondering if all this is simply targeted at providing funding to clean up the mistakes made, and lack of foresight of the Big Three. Also, if it serves to aid them to continue on their current path of production. In other words, to clean up existing inventories and provide a stop gap measure to allow them to return to business as usual without any significant emphasis on new development of energy efficient products. All of that making the taxpayer the bag holder of the North American Industries poor judgment.

Without addressing these things, there are no guarantees of significant change, and no recourse. If the current pattern doesn't reverse on it's own within the next year or two, what guarantee is there that this crisis won't return?

The immediate need is unarguable, but how this is approached overall will determine the measure of success or failure.

Canada's Space Industry

This seems like a wise move given that this has been a successful area, and it addresses current and forward thinking.

Ditto on Cultural Infrastructure and other items related to Arts/Culture.

More later as time allows..


  1. I'm very concerned for our auto industry, Comrade. Progressive countries know the importance. My brother is a worker & I'm a good ol' Union girl from way back. People died to unite us against unbridled, government-endorsed Capitalism. For all it's faults, let us not forget that.

  2. Hi comrad.

    As usual the government adds another tinkering to the long list dragging down our society instead of focusing on a few major changes to push us in new directions. Obama seems to grasp the idea as he is launching the states on new green economy while entrenching a bit of the old economy back home.

    Just got my income tax form which reminds me how every year the government in power adds legislaion that tinkers with it always adding more complexity and never taking a real look at it and making it simple again. Then look at every other department and they create more complexity every year. The sad part is that every once in a while someone goes on a reduce red tape tangent and suppresses any good parts of the laws to protect us or the environment and pushes those parts that allow criminal actions again. I remember at a forum I was invited to on fishing regulations after several people wanted more rules a conservation officer standing and dropping a six inch binder on the table stuffed full. He said there are the current rules in short form and add two more in my car covering environmental rules I am supposed to enforce then realize there are exactly seven officers in the whole Yukon. Now how many more rules do you want and exactly how do you propose to enforce them?

    Where does all this come from? The desk jockeys earning the big saleries with bloated staffs helpng them dream up new sources of paper to add up on their desk so they can ask for more money. It doesn't matter what party is in power the rot in the top half of the public service especially those hired by the party in power as their staff overseeing the whole mess will never be removed until the whole management structure is removed. Maybe my experience is different to most but the only bad times I have had is dealing with desk jockeys while those on the front line have been generally far more helpful and friendly than most private sector workers.

    AS far as the auto industry in Canada goes when GM turned down our loan offer the writing is on the wall that some if not all of the Detroit three will be pulling out. We better get used to it and start dealing with it. Smarter thing for Harper to have done in the budget is to roll all the loan gaurentees into one amount and buy out a division of Chrysler or GM along with all Canadian facilities then sell an equal amount of stock to Canadian investers only and let them start building existing vehicles and with government help retool the plants to produce the types of vehicles we need in the future. We have all the parts suppliers we need and we could keep the industry alive. The next major change would be to change all levels of government vehicle leasing to Canadian produced only unless we don't make a needed vehicle here. This incluudes Honda, Toyota and ANY company making cars in Canada. Maybe this would encourage the other companies to stay.

    Thats my rant for today but here is a government joke.

    How many desk jockeys does it take to change a light bulb?

    Just one as they all know how to do it but it will require 7 meetings, three lunches and two votes to determine which one gets to do it! this whole process might have to be repeated if the person elected doesn't know where the spares are kept.

  3. The Parliamentary Budget Officer has concluded that the government's stimulus package will only create 120,000 jobs vice the 160,000 advertised.

    To-day we find out that 129,000 lost their jobs in January. So, the whole stimulus package will almost look after job losses of the last month.

    Now what?

  4. A LTTE in the Citizen to-day has a look at the largesse of EI. The conclusion is devastating:

    The reality is that most workers do not even qualify for EI benefits, a problem not addressed in this budget. The Harper government would rather give tax cuts to their friends in the corporate sector than invest in the people who need it. Real and substantial investment in social programs and supports would bring people out of poverty and provide a boost to our economy, especially to local communities hardest hit by the recession.

    Allison Pilon,

  5. Wayup! You are hitting the heart of the matter now. WAY TOO MANY PEOPLE hanging on to the coattails of those who actually do something, provide goods or some service of value. In fact, as your musings point to, they actually get in the way and far less gets accomplished in too many cases. They are also a source that rots the good in a system, as those who actually produce, often become bitter upon realizing the truth and choose to become like the hangers on.

    What you refer to was once called Empire building, and it's rampant and out of control. And it's not just the public sector, but they are one of, if not the worst. And this is a direct cost to the system overall, causing everything to inflate and drive the cycle toward unaffordable lifestyles.

    I became aware of this in the 70's but didn't understand how much it was spreading until the mid 80's. My first knowledge was in relation to Social Services then the Health system. Next came an eye opener regarding Co-ops. It went on from there.

    As I watched the administration sections of these entities balloon, while seeing the actually effectiveness decrease and costs increase, I realized this couldn't go on forever. Just like our recent economic bubble. There is a direct relationship between these things. All are based on unsound thinking and poor planning. Maybe no real long term planning, just some odd blind faith that these things will self perpetuate forever regardless.

    Some examples. I had a relative who worked in Social Services years ago, but was more or less a contract worker. She was hired 6 months at a time. Her case load was about 60 to 70 files, and she would travel to peoples homes and actually interact with them. Eventually, the suits, politicians and University grads took over and she was replaced by a shiny faced Univ. Grad who could only handle a case load of 35. As time has gone on, they now hide in their expensive government offices, and the people have to come to them. The salaries are twice to three times what they were in adjusted terms as well. So to be brief, it costs at least twice as much to get less than half the results.

    On the Health front, the focus became increasing administrations and cutting down floor staff such as Nurses. Then to add insult to injury, in our prov. they did away with the lower paid category of Nurses Aides, and all Nurses had to be Registered Nurses. Said Reg. Nurses used to receive their training at and through the Hospitals. This changed and then they had to get a University degree. Did this result in better Nurses? No, actually a lot of them didn't care for the Nursing duties, expecially the dirty jobs that the Aides used to do. So the net result was lot's more Admin, far less Nurses and much higher training costs and ballooning budgets. And some people wonder why medicare is in trouble.

    A similar thing happened with the Co-ops, as the suits took over and wanted to sell furniture and modern baubles, rather than the traditional grocery, clothing, bulk fuel and farm supply items. They also got caught up in the fancy store syndrome which in the end made put them at a disadvantage with the big 2 or 3 players and even the dividends that people used to receive from membership disappeared. So people got higher prices, less overall selection, many more suits, no dividends and higher prices. Good job what?

    Like I just said, these things can't go on forever. In early December/08, they closed the main Co-op centre in my area. The place we used to go once every 6 weeks or so for feed, farm hardware, some grocery or other misc. necessities. We even got our chicks there every spring. It had been there since I was a kid, and now it's gone. That entire section of our local city has transformed and there is nothing left in that area that used to be there. The notables are the Co-op, Eaton's retail and catalogue centres (both 5 story structures), Woolworth's, the CN freight sheds and rail yard and a Swift meat processing plant. All gone.

    What's there now is one of the old Eatons buildings that was gutted and rebuilt and now houses Professional offices, government, some service sector and the rest is parking lot and some empty buildings.

    But we got 2 Walmarts, a Best Buy, Future shop, Cosco, 3 or 4 Loblaws Superstores and countless overpriced Sobeys stores.

    I was out doing a bit of shopping yesterday, and it was kind of eerie really. I stopped at a Public Auto Auction place where they had an auction the night before, and everything that was worth anything was still there. It hadn't sold. Then on to a Zellers where they weren't doing enough business to pay the staff and the hydro. Next stop was the Source and it is tucked away in a Mall that is anchored by the Bay. For now. There are more shuttered stores in that mall than open ones. One large store front is now rented to a flea market that only operates on weekends.

    Me thinks the bubble has gone pop!

    One more thought, and this one has nothing to do with playing whackamolie with the Civil Service. On that old Eaton's building, a local developer bought both of the old buildings and for some reason, tore down the newer one and focused on the older. Now this guy was a bit of an anomaly to begin with as he seemed to have access to far too much money for the times. Bit of a shell game actually. Like many of his kind, he proceeded with this project by issuing bids then dragging his feet in paying people. When the project was about 80% complete, without any warning, the financiers and banks padlocked the place and hired guards to keep everyone out. Including the various contractors who were owed money and many of whom had tens of thousands of dollars worth of equipment inside. They never saw that stuff again, as the creditors seized it along with the building, and sold their property.

    Some months later, a mysterious firm emerged and purchased the project at pennies on the dollar and completed it.

    It is wrong that the law protects the interests of banks/major creditors in this way and supports them in taking the property of innocent hard working people. I mentioned this in case any reader has friends or family that are contractors/trades people and may find themselves subject to similar circumstances in these times of failing businesses etc. Many people, even contractors don't know this is the law. Many simply fall victim to a false sense of security as well.

  6. Now what indeed Herb.

    Start cutting some real fat? Like the Preacher says. I came up with another thought just now. Instead of buying all those trucks for the military from the US, hows about we tender that business to Canadian trucking firms and independents for the time being? Just one thing of many that a good manager would be looking at. And let the Comrade guard the bid envelopes. lol Short term savings could replace part of Ms. Finley's billion dollars for new low income housing that she was so sure would be in the budget. After all, short term is all this stimulus is about. If the seas don't calm, and the ship doesn't right itself in the next 12 months, we will be doing this all over again, only bigger.

    EI, EIO...Old MacDonald had a donkey on that farm too didn't he? Such a wonderful system. And oooooooh, how them Tories hate to give it back. Specially considering Paul Martins plundering.

    I shouldn't really get started on that, as it will remind me of the two decades of contributing 4% of the wages of everyone that ever worked for me, only to never be able to qualify to draw a dime out of the system. It's not that I minded paying the 4%, its the inequity of it that bugs me. The reason for a small business to end doesn't matter, be it economics or the government unfairly forcing you out of business, you are on your own. No net, no time to adjust.

    You know, this is a lot like the Titanic. Lifeboats for first class only.

    The gal who wrote the article is correct, and there is no good reason for this government to pull a scrooge with money that isn't theirs and no good reason for Ignatieff to be complicit. For all that he is touted to be such a brain, I haven't heard anything from him yet that indicates he has a real grasp on this economic situation. He is more like a Prairie Dog, hiding in his hole until fair winds resume over the plains.

  7. Linda, my favorite story in conjunction to Unions relates to a book I once read on the formation of Unions in the Coal mining and Railway industries. One thing that I always remember is that a person/tradesmen working in railway repair shops and rail car factories could sometimes work all day and end up owing the company money. The reasons were simple, as they were paid on a piece work basis and there were penalties applied if they didn't reach quota. The further off quota, the bigger the penalties. So if there was interruption in their ability to achieve the quota such as short supply of parts and hardware, equipment breakdowns, staff shortages etc., the worker could end up in a negative income position at the end of the day.

    In the coal mines it was wages and safety. Both of these industries were notorious for their greed and brutality. Thus, the formation of Unions. My Mother told me a story long ago about King Edward the 8th visiting the coal mines of Wales and how shocked he was as a result. Apparently this led him to begin a campaign of reform for the mining companies, which did not set well with the old feudal lords. Not well at all. Supposedly he made some remarks toward better treatment of workers in Hitler's Germany and these remarks were later used against him by said lords by indicating he was a Nazi sympathizer.

    Me old Ma believed that his abdication resulted from this, and that the story of his marriage to the widow Simpson from the US being the cause, was just a cover.

  8. Speaking of experts;

    From a article on yahoo re: the 129,000 jobs lost.

    "The January losses were not totally unexpected given the trend in labour markets both in Canada in the U.S. since the fall, but economists had been forecasting a much tamer number of around 40,000."

  9. The big three isn't going to look like it once was. They've been sinking for about 10 years now. Perhaps it won't be the big three anymore??

    Friday's numbers didn't surprise me. Just the tip comrades.

    Canadians aren't going to know what hit them.

    Peace dudes.