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Fear Grips Party Leaders as System Heads for Depression
CPS Election Analysis 2008 - Week 6
William O’Casey
The Canadian leaders’ debate was an expression of the fear gripping the ruling class that the capitalist system is under duress and in jeopardy of collapse. Resolving the capitalist economic crisis and systemic failure of the neo-liberal policies though layers of neo-con jingoism is the growing chorus of pleadings to workers to come to the aid of the system in its time of need. The chorus begins with threats of job, pension and home loss to bring workers into line.
Revealed, in a stark and barren form during the debate is the depth of differences between the objective interests of the workers and capital represented by the party leaders. Anything less than a great alliance of workers and capitalists will spell economic disaster for the nation say the leaders of the political parties. While this reaction is being perpetuated by the ruling class in a desperate bid to save their parasitical hides it still carries considerable weight within sections of the left.
It is not a requirement of workers to save the system in collaboration with monopoly capital. Workers advance their own program that places their needs before the interests of corporate Canada. Workers struggle in their own interests first. Saving the capitalist system is not in their interests. Fear over takes capitalist parties when political demands are advanced by the working class.
On The Bank of Armageddon
The global capitalist economy shakes with uncertainly and stock market speculators look to workers to bail them out - again. Economic depression in the major industrialized economies is only being held in check by the injection of a massive $810 billion financial bailout by the US government. Success of the intervention by the US government to save the system is not a certainty with many capitalist economic experts now saying that a severe and protracted depression is probable.
The economic calamity gripping all imperialist powers is a made in the US crisis built on decades of borrowing for wars of aggression and occupation - spending trillions of dollars on advanced weapons systems, conventional and nuclear weapons build ups. US leadership of the imperialist powers is fraying and causing splits in previous alliances. The US economy is teetering on insolvency and only intervention of the state using workers’ savings will resuscitate the sharks of Wall St. The US is a failed state, bankrupt and rife with corruption and parasitism. Saving the system is not an option for workers.
The U.S. housing slump has had devastating consequences for US working families. Home losses, jobs and income have resulted in 10,000’s of foreclosures and wiped out retirement savings. Workers have been abandoned. Canada is heading in that direction as well. The $32 billion Canadian ABCP pyramid scheme has threatened pension funds, workers’ saving and now workers’ homes. Collectively the banks are committed to bailing out a handful of the biggest investors eyeing up CPP and EI funds for capital. Finance Minister Flaherty is in agreement with this plan as well as the Canada’s central bank.
Finance Minister Flaherty speaking to students at the University of Western Ontario on October 3, 2008 said that the US crisis won’t spread to Canada. Flaherty working in concert with the Canadian banks is attempting reassure Canadians that capitalism is sound and functioning well in Canada. Bank of Montréal economist Doug Porter echoing Flaherty’s claim insisted that there is little Canada can do in the face of such “complex” conditions. In other words Canadian banks will retain control of money and lending and will not part with their windfall profits unless the Canadian banking system is compelled to. Workers on the other hand who are losing jobs, falling behind in mortgages or faced with having no home heating fuel for the winter, a growing problem in Atlantic Canada where workers are switching to wood burning stoves because of prohibitive home heating fuel costs, can just weather the storm on their own.
Bank of Canada Governor Mark Carney speaking in Montreal on Thursday September 25, 2008 said, “Any slowdown in the U.S. economy would have consequences for Canada”. Governor Carney admitted to having concerns for the Canadian economy because a significant portion of the exports that fuel Canada's economy are tied to U.S. consumer spending. Lumber, auto, energy and mineral exports make up a considerable portion of Canadian GDP. Of course Carney’s concerns are for his stock market friends – he could care little for Canadian workers, but the comments are noteworthy because the governor’s comments seem to be at odds with the Minister of Finance. The Canadian economy has been sold out to US interests over decades of neo-liberal agendas of free market gangster capitalism. It leaves Canadian workers with little in the way of immediate options other than waiting for the genius of finance to settle their debts.
Close to a trillion dollars of US workers’ pensions, health care, education are being risked with the reassurance, from the very same gangsters that stole the money in the first place, that it is a good investment and will provide a solid return after the markets “stabilize”. With $11 trillion in debt US insolvency will translate to severe hardship not only for US workers but for Canadian workers. This is a result of the single market raw material export policies of successive Canadian governments starting with the St. Laurent government in 1947 and completed with the Mulroney Government. Such is the boom and bust economy of capitalism - privatize profits, socialize losses.
Behind the Economic Curve
The US crisis is rapidly lapping at the shores of Canadian industry. A growing swell of industrial curtailment is taking place rapidly and gaining momentum as a response to the US stock market crisis. Within Alberta where many environmentalists call for a slowing the “pace of [oil sands] development” and look to closing tar sands projects with calls of a moratoriums and “no new approvals” are behind the economic curve – significantly.
BA Energy announced September 25, 2008 that its Heartland heavy-oil upgrader in Ft. Saskatchewan Alberta north of Edmonton was shelved for at least 4 years. The BA Energy statement is the latest in a string of announcements that are mounting. Royal Dutch Shell PCL (RDS) announced that its plans at its Ft. Saskatchewan expansion will be shelved in favour of lower cost jurisdictions in Oklahoma and Illinois in the US. This announcement followed another RDS of its planned expansion of its Sarnia Ontario refinery will be shelved for similar reasons. Syneco announced in March 2007 that it is scrapping plans for its multi-billion dollar Northern Lights upgrader in Ft. Saskatchewan.
Royal Dutch Shell PLC announced July 8th 2008 that is has scrapped plans to build a multi-billion dollar refinery near Sarnia Ontario close to St. Clair Township in the south-western part of the province. The refinery was to have processed 150,000 to 200,000 barrels a day from feedstock originating in its expanding Alberta oil sands operations.
Citing poor market conditions and rising construction costs RDS announced its decision to cancel plans to build the refinery. This abandonment of the project was taken while Harper administration watches in silence as the wholesale destruction of the manufacturing industry in Ontario continues unabated. Over the past 5 years over 400,000 Ontario workers have lost their jobs.
Shell Canada said on their web site that the decision was a difficult one and was made only after a “comprehensive assessment of all aspects of the proposed project, including the current project execution environment, market conditions and the current inflationary pressures across the oil and gas industry.”
Shell General Manager of Manufacturing Expansion, Amrik Ahluwalia, said that “This decision is a very difficult one for Shell and it is only taken after careful consideration.” Ahluwalia added that, “On behalf of Shell, I would like to thank the people in the Sarnia region who opened their doors to us, attended our open houses or who took the time to share their hopes and concerns with us.” Cold comfort for the thousands of construction and industrial workers in Ontario who are forced to leave family and labour in the work camps of Ft. McMurray and Ft. Saskatchewan.
The Globe and Mail reported the same day in a reprinted Reuter’s article entitled, “Shell quits Sarnia refinery plan” that, “Surging costs and a stretched labour force have hit projects throughout Canada's oil and gas industry, forcing some to be delayed in recent months.” Stats Canada’s May 2008 Labour Force Survey released June 6 2008 reported that Ontario labour force is “stretched” to the tune of 456,000 unemployed workers. From April to May 2008 Ontario eliminated 16,000 jobs.
Norval Scott, Globe and Mail journalist, reported in a July 8 2008 article entitled, “Shell shelves plan for Ontario refinery”, that Dave Collyer, Shell's chairman for Canada said in a new brief following the announcement of the cancellation of the Sarnia project that, “[Shell’s] looking at retooling its Martinez, Calif., and Deer Park, Tex., refineries to take more Alberta crude”.
Collyer said in the briefing that Shell is looking to expanding the upgrading capabilities of the two US refineries “rather than going with a full, $27-billion (Canadian) expansion of its Alberta upgrading complex near Edmonton”. The federal Minster of Industry, Jim Prentice, has remained silent.
Petro-Canada is nearing completion of its Refinery Conversion Project (RPC) in Edmonton has announced that it is reviewing its Fort Hills project and will make a decision on the future of the project before the end of 2008. Junior consortium partner in the Fort Hills project, UTS Energy Corp., announced that its 20% stake in the project is jeopardized because it is unable to raise capital on credit markets.
The RPC project at its peak employed 3000 trades, engineering, technical, and design and management personnel. The completion is already having affects on employment in the area and nationally. RDS in an effort to secure trades personnel has been offering Living out Allowances (LOA) for workers travelling from other parts of Canada. RDS will cut LOA as more trades go “back on the books” at the union halls. This will effectively send hundreds of workers back to the east coast as monies provided to those workers who travel to Alberta will be clawed back making living costs unaffordable for those workers.
Those political voices that are calling for moratoriums in energy expansion are behind the economic curve – significantly. Workers will soon ask the question – where do we work?
The Sharks are Circling
At the same time Canada is continuing to back stop the financial consolidation and concentration underway in the US. The Globe and Mail reported in an Associated Press September 26, 2008 article entitled “WaMu becomes biggest U.S. bank to fail” that Washington Mutual Bank (WaMu) that the Federal Deposit Insurance Corp. (FDIC) seized WaMu on Thursday and then promptly sold its banking assets to JPMorgan Chase & Co. for $1.9-billion this follows JP Morgan’s takeover of Bear Stearns Cos. for about $1.4-billion in March.
WaMu’s $307 billion worth of assets were purchased by JP Morgan for $0.0055 on dollar. FDIC chairman Sheila Bair said, “this is simply a combination of two banks”. JP Morgan after the combination is now the second largest US bank after Bank of America Corp. which swallowed investment bank Merrill Lynch. This was part of a series of events that witnessed Lehman Brothers Holdings Inc. going bankrupt and American International Group Inc., the world's largest insurer, getting taken over by the government. The “negotiations” going on in Washington are discussions on which bank will profit from the spoils using workers’ wages to complete the deal.
Toronto-based insurer Sun Life Financial Inc. reported the same day that is will take $270 million hit in exposure to bonds issued by WaMu. This would bring Sun Life total exposure to the US stock market meltdown to just under $1 billion after it revealed last week that it also holds $315-million in exposure U.S. insurer American International Group Inc. (AIG) and an additional $334-million (Canadian) in bonds issued by failed New York investment bank, Lehman Bros. Holdings Inc. Manulife Financial of Toronto also revealed that is expecting loses from the failure of the 3 US financial entities to total over $790million.
Royal Bank of Canada (RBC) chief executive Gordon Nixon that RBC is considering making purchases in the failing US banking sector. The RBC executive said that the crisis unfolding in the US could speed up consolidations.
How quickly things change under capitalism! How rapidly the economics of the system quickly overtake the “softer” issues of the day. How far the world wide environmental catastrophe looks when your house is gone, you are unemployed and you have no income for food, heating, transportation or clothes or your children - Capitalism 101.
The confusion in the Canadian federal election is reaching frenzied propositions as the Liberals, NDP and Greens scramble to respond to the crisis and attempt to offer solutions to jobs – the “Green Shift” has been exposed for what it is – the “Green Shaft”.
It is this very same position that is bedevilling the NDP and the Liberals as they have tried to make hay from the easy targets of environmentalism. Both the Liberals and the NDP have abandoned their “green” platforms for economics platform. The Green Party has also had to face this reality reshaping their program to discuss how they plan to save the world while being pushed by the working class into economic policy.
Crisis in Environmental Policy
The crisis in environmental policy stems from apprehension in workers over their jobs and long-term livelihoods. This is best illustrated by the Jack Layton interview that was aired on CBC television on September 17, 2008. The first two (2) questions asked of Mr. Layton were questioning how the NDP reconciles calls for tar sands moratoriums with employment and how the NDP supports Ontario auto workers but not Alberta tar sands workers. These are real questions that workers themselves are asking.
Speaking at an all-candidates meeting, September 25, 2008, at the University of British Columbia School of Journalism, NDP Vancouver Centre candidate Michael Byers, said that “we need to shut the tar sands down” . Byers, is also the Chair for Canadian Centre for Policy Alternatives’ “Climate Justice Project”. The CCPA recently published “The Harper Record” a book that examines the tenure of the Harper Government. The Energy and Environment Section Chapter entitled, Stuck in the Muck, The Harper Tar Sands Legacy”, by Blair Redlin and Caelie Frampton concludes that environment trumps workers jobs and it is the overarching driver to Canadian energy strategies. The authors say that, “Whether the demand is for moratorium or “no new approvals” or a complete halt to tar sands production, there is much work for activists to do...discussion of an energy strategy should be driven by the urgent need to curb climate change.”
Communists contend that capitalism in its present stage of its development – imperialism – is moribund, is no longer a progressive force and has reached its historical conclusion and cannot be reformed and must be replaced with socialism. The environmental left postulate that the overarching threat to the planet is global warming and that capitalism is capable of overcoming its internal contradictions and solve the scientific, technical and engineering problems associated with a post carbon world. Communists contend that the overarching problem is imperialism and the threat of nuclear war and it can only be solved by sweeping away imperialism and replacing it with a new system where the interests of the working class are foremost and the material basis of the nation is placed in the hands of people.
This is realized primarily through the political and economic struggle led by the working class for the control of energy, natural resources and the productive basis of its implementation in the service and for the needs of workers first. And that this struggle begins with the nationalization of energy and the primary industrial capacity and infrastructure of the nation, which must be led by labour and not the political opportunism of the party leaders. |