Democracy, for a change

by Joyce Murray

• When news broke that a by-election was imminent in Labrador following the resignation of Peter Penashue – the disgraced Conservative MP who stepped down following news about his election financing irregularities – I called Green Party leader Elizabeth May and asked her to consider having the Green Party Electoral District Association (EDA) not run a candidate in the upcoming by-election. In light of Penashue’s election by a mere 79 votes in 2011, it seemed imperative to consult the local riding associations in question, to see if they felt collaboration was appropriate. The result is that the Green Party announced it will not run a candidate in the Labrador by-election. They even asked the NDP to consider doing the same.

This illustrates the potential of the one-time cooperation strategy I am proposing as a key element of the political platform in my campaign. In almost 60 ridings in 2011, Conservative candidates won with less than 50% of the vote. My proposal is a one-time agreement, initiated at the local riding level in communities where Conservatives won due to splitting of progressive votes. As leader, I will empower Liberal riding associations to assess the circumstances in their own communities and decide if cooperation with other progressive candidates is right for them – a truly democratic process. A Liberal, Green and NDP candidate would still be nominated in every riding. However, ridings that choose to cooperate would then engage in a progressive “primary” style run-off, a transparent process in which the candidate deemed most likely to beat the Conservative candidate would be selected.

If progressive parties can set aside their differences to overcome our dysfunctional elections and defeat Stephen Harper in 2015, the focus will then shift to the reform of Canada’s ailing democratic systems. This isn’t just about winning the next election. This is about creating a more representative and collaborative Parliament that better serves Canadians and combats voter apathy. My record of leadership in business and government is grounded in my cooperative approach and cooperation is the hallmark of progressive Liberal governments of the past.

Other progressive parties will participate because it’s what Canadians want. Many Liberal riding associations are cooperating at the local level right now and are in regular contact with Green Party and NDP riding associations. I am confident the public’s determination to achieve cooperation to defeat Stephen Harper will prevail.

Let’s be clear. Electoral cooperation is far from the same thing as merging. Cooperation does not compromise party identity; nor does it lessen the distinct values each party espouses. It means we are working together in the best interests of Canadians to achieve a common goal, just like NHL hockey players who cooperate to form Team Canada in order to win gold at the Olympics and then go back to competing against each other afterwards. Except the “gold medal” this time is that we get to reform our electoral system and make Parliament more representative.

As Liberal leader, I will drive a national process to rethink our electoral system. We will seek input from the public, parties and experts across the country. We will look at best practices from around the world, with the goal of crafting a made-in-Canada system that ensures fair, straightforward elections and reinvigorates our democracy for decades to come.

Canada is too important to let Stephen Harper win another majority simply because our archaic electoral system encourages vote-splitting. So let’s work together – starting in Labrador – to give Canadians the democracy they deserve.

www.joycemurray.ca

Put Canada First

3 Parties Maple Leaf

Leadnow.ca is an independent community that brings generations together to strengthen our democracy and build a fair, open and responsible country. Leadnow.ca’s small staff team and 225,000 person community includes Canadians from across the political spectrum. Leadnow.ca was founded two years ago by a group of Canadians who wanted to find new ways to help people hold our government accountable and support political cooperation to meet the challenges of our times. The Leadnow.ca community is independent of any political party.

During a series of local gatherings in the fall of 2011, our community identified electoral reform, inequality and climate change as our top priorities. In 2012 and 2013 we asked our community what they thought about cooperation between the NDP, Liberals and Greens to defeat Stephen Harper and then pass crucial reforms. Amazingly, on both occasions, over 95% of the tens of thousands who responded told us that they “agree” or “strongly agree” with this idea.


Sign the LeadNow petition and tell your government:

“I call on the NDP, Liberals and Greens to cooperate for Canada. We can make our government work better for Canadians. During the next federal election, I call on the NDP, Liberals and Greens to work together in key ridings to defeat Stephen Harper’s government. After the election, I call on them to cooperate to protect our environment, build a fair economy and pass electoral reform.”

In the last federal election, 61% of voters cast ballots for change, but the vote split and our broken electoral system gave Prime Minister Harper a majority of seats in Parliament.

Now, Prime Minister Harper is damaging our democracy, destroying our environmental protections and undermining our economy. We can hold Prime Minister Harper accountable, renew our democracy and rise to the challenges of our times – but we need to work together. Here’s how:

During the next election, the NDP, Liberals and Greens can cooperate in key ridings to defeat Stephen Harper’s government. After the election, they can work together to fix our broken electoral system, protect our environment and build a fair economy. Canadians are ready for cooperation and we have to act now to send a powerful message to party leaders that Canadians will work together and vote for cooperation.

Canadians are already joining the party of their choice to support cooperation. During the NDP leadership race last year, 10,000 people joined the NDP through this campaign. They built a constituency for cooperation in the party and secured a strong commitment to electoral reform.

Right now, the Liberal Party is preparing to choose its next leader, cooperation is a major debate amongst the candidates and everyone is watching to see if pro-cooperation Canadians will stand up to be counted.

The stakes

Canada is at a crossroads. We need to work together to create a strong democracy that brings Canadians together to make wise choices about how we protect our environment and build a fair economy in an era of global uncertainty. We need to repair the damage that is being done to our country and build new relationships between the people who call this country home.

We need to have a real national conversation and make wise decisions about these urgent issues, but our electoral system encourages an “every party for themselves” style of politics that focuses attention on our divisions and distracts us from the major challenges we face.

More and more Canadians are ready for cooperation: Ready to focus on our shared values, to respect our differences and to take action together on a few key issues. We are calling for a one-time agreement between the NDP, the Liberals and the Greens to work together to stop vote-splitting in a small number of ridings, defeat Stephen Harper and then pass crucial reforms for our democracy, environment and economy.

Cooperation is about more than “winning” an election. For us, the values come first and the strategy comes second. Cooperation is about building a new majority consensus that will renew our democracy, protect our environment and build a fair economy – and ensuring that a majority of Canadians are properly represented in our next government.

The plan

In the 2011 election, a majority of Canadians voted for change, but the First-Past-The-Post voting system gave Prime Minister Harper a majority government with only 39% of the popular vote. In a country of more than 33 million people, Prime Minister Harper’s margin of victory was a razor thin 6,201 votes, spread across 14 closely contested ridings.

Our democracy, environment and economy cannot afford a second Harper majority. We need to act now to bring Canadians together to meet the urgent challenges of our times.

Cooperation is about more than defeating Harper. For cooperation to work, we need agreements between the parties to work together on a few key issues of major concern.

There are a number of different ways to organize cooperation to ensure local democratic control. We believe that the parties, candidates and local riding associations will need to negotiate to develop a solid plan that everyone can agree to.

We need to build a lasting movement for cooperation within the parties. Leadership races are the most important moment for pro-cooperation Canadians to inspire change within the parties and we need to show the parties that Canadians will work together and vote for cooperation.

The values come first, the political strategy comes second. That’s why, no matter what path the party leaders choose, we will be organizing at a grassroots level in key constituencies in 2015 to support cooperation to defeat Prime Minister Harper’s government and then pass electoral reform, renew our environmental protections and build a fair economy.

We know that Canadians are ready to work together to meet challenges of times and renew our democracy. National polling tells us 80% of Liberal, NDP, and Green voters would be willing to vote for a different party if it meant they would achieve progress on issues they care about.

Canadians are ready for cooperation

Cooperate for Canada includes citizens from across the political spectrum. Many are active members of the Liberals, NDP or Greens. Many care passionately about the future of our country but don’t identify with any political party. Some are people who have voted conservative in the past but now feel that Canada is heading in the wrong direction and want electoral reform. All of them feel that this is an idea whose time has come.

From joining the party of their choice to support cooperation in key votes to hosting events that bring riding association leaders together in their communities, “cooperators” are working from the bottom-up to hold Harper accountable and fix Canada.

Learn more and get involved at www.leadnow.ca

Joyce Murray’s vision for Canada

Joyce Murray

An open letter to Canadians from David Suzuki

 

• I am writing this as an individual citizen, not on behalf of any organization or political party. In fact, I do not belong to any political party. I will support candidates, platforms and policies of any party that move our country towards a more just and sustainable future.

I was delighted to see that the federal Liberal party allows any Canadian to participate in the choice of its leader. I urge everyone who is concerned about democracy, the environment and social justice to take part in this selection process and thereby support for specific policies and visions for this country.

David Suzuki
David Suzuki endorses Joyce Murray for Liberal leader

I am heartened by the platform laid out by Joyce Murray. Sustainability is one of the key concepts underlying her policy proposals from food to climate. She recognizes that Canada is one of the most vulnerable industrialized nations to the impact of climate change – as a northern country where warming is going on faster, with the longest marine coastline in the world threatened by sea level rise and the economic vulnerability of climate sensitive areas of agriculture, forestry, fisheries, tourism and winter sports. Her proposal to reduce greenhouse gas emissions includes doing what Sweden, Germany, Australia and even China already do, namely, put a price on carbon, which is both an effective inducement to reduce emissions and a revenue source for much needed initiatives such as public transit, efficiency and renewable energy.

You can influence the policies of the Liberal party by registering to vote in the leadership race. For me, Joyce Murray presents a platform that I am going to support. I hope you will give her your support too, if you agree.
Deadline: Sunday, March 3rd.

Gender equity is a critical issue today and her proposal to mandate targets for government organizations and committees is much needed. And finally, she calls for progressive elements to work together to avoid election of parties with a smaller proportion of votes. She is boldly pressing for electoral reform through proportional representation to get away from the tyranny of our first past the post system so that minority positions can be represented in government.

You can influence the policies of the Liberal party by registering to vote in the leadership race. For me, Joyce Murray presents a platform that I am going to support. I hope you will give her your support too, if you agree.

Sign up to support Murray by March 3

Canadians are joining the NDP, Liberals or Greens to support cooperation. Right now, the Liberals are choosing a new leader, and any Canadian can vote for free and support cooperation in this race, but you must sign up before March 3rd at http://cooperate4.ca/join

Support Joyce Murray at http://joycemurray.ca/endorsements/192-david-suzuki-open-letter>register

After March 3, keep encouraging people to cooperate.

Liberals shouldn’t be too proud

by Paul Lemay

Liberal Leaf

• When I was a boy growing up in the ‘60s and into the ‘70s, I remember how we used to look up to our prime ministers, regardless of the political party they represented. But after Watergate it seemed the bloom on all political roses began to fall off. Now 40-plus years on, all we’re left with are a few thorny stems and the few precious petals we do have are now dried and sandwiched between the pages of a scrapbook.

And politics isn’t the only sphere in our oh-so-modern world that has seen a deflowering of its ideals. Take sport, for example. Its first high-profile Watergate equivalent came with Ben Johnson at the 1988 Seoul Summer Olympics. But that was only the beginning. A quarter of a century later, the use of performance-enhancing drugs in sports was still making worldwide headlines when Lance Strong-arm’s long-running campaign of deceit came to its own long-overdue end. But instead of witnessing any obvious sign of contrition on Oprah – Lance Armstrong doesn’t do remorse well it seems – we saw a politically calculated confession.

Welcome to the post-apocalyptic new age where all that was once sacred melts in a slow-mo dance before our now more inquisitive tech-savvy eyes. It’s an age where the temporary titillation of our appetites for the dethroning of one-time heroes leaves us with little else to celebrate than its putrid droppings.

Oh wait, perhaps I spoke too soon. I forgot the current federal Liberal Party leadership contest. Now there’s a cultural campfire we can all gather around for a few more pointed laughs and dethronings on a cold winter’s night. But fear not, we’ve got the CBC’s trusty At Issue panel ready to tell us how to think about such weighty matters. And in case you hadn’t heard – and who hasn’t – the latest Liberal contest is an all but done deal if the new ‘Delphic Oracle’ of Twitter followers is any indication. On that dubious score, J.T. already wears the dented crown.

So forget policy. Forget substance too. And by all means, forget the debates. It’s all about Trudeau’s great hair and his ability to float like a butterfly and sting like a bee. It’s all about the headline act, that and Mad Men ad men sizzle, because that’s what sells – the only way TV networks seem capable of maintaining herds of entertainment famished viewers.

But I digress. Now for a bit more political substance: On a foggy late January afternoon in Vancouver, 900 devoted Liberals piled into a hall at no less than $20 a head looking for more comparative clarity from those seeking the leadership. Of course, for a party dangling from a fine thread in hope of climbing out of its crevasse of third place, optics matter. So why then did they opt for the swanky Westin Bayshore hotel next to trendy Coal Harbour and Stanley Park rather than a hall in suburban Surrey where the faithful were already gathered for their annual policy conference? No, that was too simple. Better to go through the added expense, risk and hassle of bussing the buggers 25 kilometres downtown like school kids in a well-meaning affirmative action program. Why too did the party decide to charge another $129 to attend a post-debate reception? Great way to promote one’s image as a party of accessibility!

But let’s get to the debate itself shall we. With the Liberal Party looking for a way to rebound into electoral relevance, it doesn’t take a rocketman to see it needs to consider cooperating with opposition parties if it hopes to oust Stephen Harper from power. Many believe it’s the only realistic way to overcome the devastating effects of vote splitting due to our current first-past-the-post voting system in the short-term. Repeated public opinion polls tell us as much.

CTV’s Power Play host Don Martin even reinforced the point on his January 22 show reminding viewers how seven years earlier the Conservatives returned to power because three years before that the Canadian Alliance party merged with the PCs.

Of course, none of the prospective Liberal candidates are proposing a merger with the NDP. Yet you wouldn’t know from the way Martha Hall Findlay, Martin Cauchon, Deborah Coyne, George Takach, David Bertschi, Marc Garneau and Justin Trudeau talked, blurring that line, and then piling on Joyce Murray and anyone else in the audience who might have the temerity to utter the word “cooperation” with opposition parties in the next election. In fact, all but Murray and Karen McCrimmon seemed downright angry when the topic first came up.

In French, Trudeau asked: “What does it mean to cooperate? It means the priority would be on tossing out [Mr. Harper]… [and] to win and not to serve Canadians.” (Huh?) Takach went further: “No cooperation. I don’t like it. Harper likes the idea of merger or cooperation.” While Garneau said: “…to do so is to be an accomplice to the crushing of the Liberal Party.” Findlay not only challenged but some might say even shamed any in the wider audience who might be entertaining such heretical thoughts, chiding (in French): “Where has your confidence gone? I am a proud Liberal. It’s with courage we’re going to win against Harper in 2015!” Well you got that right Martha, the proud part I mean. What is it they say? Pride always cometh before a fall.

Obviously, it’s a touchy subject for many a Liberal, so touchy, it reminds me how Lance Strong-arm so often reacted when asked whether his seven Tour de France victories came with the help of performance enhancing drugs. When he wasn’t spewing a string of flustered denials in some legal proceeding or to TV cameras, he’d retaliate by taking some poor slob to court for libel or slander, behaviour he later admitted on Oprah was a form of bullying for which he was oh so boohoo sorry.

Of course, those in the “loud and proud” leadership choir have nothing to be sorry about either. Ignore the lingering Quebec sponsorship taint. Forget David Dingwall’s unsightly, “I’m entitled to my entitlements” scar. Come to think of it, just forget any and all of the Liberal Party’s past sins. They’ve moved on, which is why they are all proud Liberals again. Phew! Problem solved. Trouble is, not everybody is so forgetful or forgiving, so quickly.

Nobody here is saying Liberals are now devoid of any redeeming qualities. They have many. The problem is that somewhere there still seems to be a lack of genuine humility. Unlike Lance, I can’t recall the Liberal Party atoning for its previous sins of pride on Oprah. Perhaps a long overdue therapy-couch session with Peter Mansbridge or Evan Solomon is in order?

As a result, many of the Liberal Party’s leadership aspirants not only remain overly aversive to inter-party cooperation, they remain oblivious and unresponsive to the wider Canadian electorate’s view on the matter. It’s easy to say you’re listening to Canadians. But let none forget: the first rule of salesmanship is to tell prospective customers what they want to hear. Politicians know that. But if these guys were really listening, every candidate on the dais would at least be open to discussing the idea of cooperating with other parties in the next election, and saying so rather than declaring, in embarrassing flares of peacock pride, they were above all such shameful grovelling.

Let’s get real. In some parts of the country, especially where Liberal growth prospects are marginal at best (i.e. the West), inter-party cooperation seems like a no-brainer. Or is it?

Some, like Chantal Hébert, say it is impractical for parties to compete all across the country except for 57 or so ridings where Conservatives would otherwise win due to vote-splitting. And there is some logic to the argument. Then again, in ridings where Liberals know they’re apt to remain on the fighting ring ropes and have little prospect of winning, why not trade the NDP or the Greens one riding for another where they are on the ropes? Trouble is, some fighters don’t know when to say uncle, especially when they look at how Muhammad Ali used his rope-a-dope strategy to beat George Foreman during their Rumble in the Jungle fight in 1974. But how many of those are Muhammad Ali level fighters? Not many I’ll bet. What’s more, even Ali, after he retired, admitted he was scared silly of Foreman’s punching power.

So while some leadership contenders may get an ego kick delivering their lines as fast and loose as Ali did in his days, those of us who look at the statistical probabilities based on previous elections and what the electorate is actually saying it wants, would suggest it’s time for them to take a humility pill, as Lance Armstrong did, finally. In fact, if Lance was to have any chance for redemption, what other choice did he have? So what makes Liberal leadership aspirants any different? If there’s to be any hope of redemption, now is the time for a little less bluster and a whole lot more humility.

Paul H. LeMay is a Vancouver-based independent writer. Originally published at The HillTimes online,www.hilltimes.com

Art & activism

How an ancient poet inspired a local initiative
to preserve McLellan Forest

by Susan McCaslin / photos by Erin Perry

Robert Bateman toured McLellan
Artist and activist Robert Bateman toured McLellan Forest and has lent his support for the preservation of the rare ecosystem.

• Last Thanksgiving, I discovered that Glen Valley in Langley still had some mature rainforest. This discovery was bittersweet, however, as I also learned the Township of Langley was planning to sell it off to raise funds to build a recreation centre.

As my husband and I walked through the forest, we paused at the base of a giant black cottonwood, estimated to be at least 240 years old by local dendrologist David Jordan. I fell in love with the forest and for the first time since the Vietnam War decided I had to become a full-on activist.

Fortunately, this forest was publically owned. Another parcel had been taken off the market earlier because of the public outcry led by a local group of residents called WOLF (Watchers of Langley Forests). In October, WOLF was given 60 days to raise $3 million to purchase this second parcel known as McLellan Forest East.

Many felt it was unfair to force residents to buy back land that already belonged to them. Shouldn’t there be other ways to raise funds for capital projects other than selling off a rare, wild ecosystem? If sold, the land would no longer be accessible to the public. It would cease to be a vital ecosystem.

Reports from biologists documented the ecological values of the forest in glowing but ominous terms such as “rare,” “high value” and “extirpation.” As a poet, I couldn’t help but notice the contrast to the local government’s language with words like “inventory,” “surplus” and “idle land.” A realtor’s listing said it was a “heavily treed…blank canvas.”

Langley Forest
The Han Shan Poetry Project garnered hundreds of poems from all over the world.

But what can an artist do? It occurred to me that poets understand the intrinsic value of nature and our need for it so I decided to organize “An Afternoon of Art and Activism” just to see what might happen. This event drew together local visual artists, poets, musicians, ecologists, photographers, a dancer and students.

A week later, 160 students from the Langley Fine Arts School poured out of two big, yellow buses to sketch and sing and photograph the forest. After sharing their art in the woods, they organized a poetry reading and filled a local café with their stunning photos.

Then my husband noticed an ad announcing that renowned wildlife artist Robert Bateman would be signing books in a nearby mall. He quickly emailed Bateman’s website and within a few hours Bateman himself responded, saying, “This is important. I’ll be there in the morning.”

Bateman commented on the irony of selling a vital ecosystem in order to build a recreation centre elsewhere. “This is the recreation centre, right here!” he said, gesturing to the earth. The attention he generated was a pivotal point, but once it was over we asked “What now?”

I remembered studying the zesty poems of an old hermit monk from ancient China named Han Shan from Cold Mountain. There, he scribbled poems on rocks and suspended them from trees. Just as he inspired the beatnik poets of the sixties, Han Shan resurrected once again to become my mentor and muse. The Han Shan Poetry Project was born.

I put out a call for tree poems. My calls soon appeared on people’s blogs and websites all over the world. Over 150 poems poured in within a week and a half and within two weeks the number had gone up to well over 200.

We placed the poems in sheet protectors, threaded them with colourful ribbon and festooned them from the trees. Poems poured in from all over the Lower Mainland, Vancouver Island and other provinces, as well as from New Mexico, California, Florida, the UK, Australia and Turkey. The exhibit included poems by celebrated Canadian poets like Lorna Crozier and Patrick Lane, Fred Wah (the Poet Laureate of Canada) and children as young as six years of age.

Poems pirouetted like white angels. Heavy drops of rain, frost, sprigs of moss and bark covered them, appearing to be the forest’s way of claiming them. Poets had set their small gestures of creative expression beside the vaster creativity of nature. People were attracted from all over the Lower Mainland, strolling through the woods and pausing to read the poems. Local visual artist Susan Falk donated a painting to the ongoing work of WOLF. The Opus Women’s Choir came out to sing carols in the forest.

Despite all this attention, the December fundraising deadline loomed and WOLF had to inform town Council they weren’t able to raise the three million. We learned that other offers to purchase were in-hand and it could be sold quickly. A letter from the BC Ministry of Environment arrived that afternoon saying that, based on its ecological evaluation, the forest should be protected as an ecological reserve, but they too didn’t have the money.

Decision-making was deferred and on January 29 the Langley Township announced it was taking three of the five parcels off the market. The community was relieved that 60% of the forest would be saved, but the compromise generated both elation and disappointment since the portion of land to be sold contains some of the most sensitive habitat for species at risk.

Clearly, it took many people to help persuade the politicians to reconsider a ‘done deal’ that could provide cash-in-hand. But what this experience prompts us to consider is the untapped potential of the arts to transform society. The success of this project shows how art and activism can dovetail in remarkable ways. Art pauses before beauty, raising the conflict between conservationists and developers beyond their various ends. It appeals to a common recognition of beauty in biodiversity.

An activist must live in the paradox of unknowing – perhaps without attachment to outcomes (though I find this difficult). Nature holds us within a larger story, a more expansive narrative; somehow, our words and actions matter. Yes, poetry matters, as old Han Shan himself told us some 1,200 years ago.

This story is not over, as taking the properties off the market is not the same as legal protection. There are some who recall fighting for the same patch of forest over a decade ago. You may wish to thank Langley township council and ask them to protect the species at risk habitat on the parcels to be sold and to follow through with formal dedication of the forests under section 30 of the Community Charter.

The McLellan Forest issue also raises a bigger question for the coming provincial election: given that all local government powers come from the Province, what is the duty of local governments to conserve biological diversity and habitat for species at risk?

For more information:


http://mclellanpark.blogspot.ca (604) 866-2259
Township of Langley: www.tol.ca
Hon. Dr. Terry Lake: env.minister@gov.bc.ca

Susan McCaslin is a poet and Faculty Emeritus of Douglas College. Her most recent volume, Demeter Goes Skydiving (University of Alberta Press) was a finalist for the BC Poetry Book Prize (Dorothy Livesay Award, 2011) and the 2012 winner of the Alberta Book Publishing Award (Robert Kroetsch Poetry Book Award). www.susanmccaslin.ca

What do Indians want?

by Thomas King

Portrait of Thomas KingThomas King is one of Canada’s premier Native public intellectuals. For the past 50 years, he has worked as an activist for Native causes. He has also taught Native literature and history at universities in the US and Canada. He is the bestselling author of five novels, including Medicine River and Green Grass, Running Water, two collections of short stories and the 2003 Massey Lectures, The Truth About Stories. He most recently published The Inconvenient Indian. Look for more non-fiction writing by Thomas King in subsequent issues of Common Ground.

Great question. The problem is it’s the wrong question to ask. While there are certainly Indians in North America, the Indians of this particular question don’t exist. The Indians of this question are “the Indian” that Canada and the United States have created for themselves. And as long as the question is asked in that way, there will never be the possibility of an answer. Better to ask what the Lubicon Cree of Alberta want or the Brantford Mohawk of Ontario or the Zuni of New Mexico or the Hupa of northern California or the Tlingit of Alaska.

Inconvenient Indian

But I’d just as soon forget the question entirely. There’s a better question to ask. One that will help us to understand the nature of contemporary North American Indian history. A question that we can ask of both the past and the present. What do Whites want? No, it’s not a trick question. And I’m not being sarcastic. Native history in North America as written has never really been about Native people. It’s been about Whites and their needs and desires. What Native peoples wanted has never been a vital concern, has never been a political or social priority.

The Lakota didn’t want Europeans in the Black Hills, but Whites wanted the gold that was there. The Cherokee didn’t want to move from Georgia to Indian Territory (Oklahoma), but Whites wanted the land. The Cree of Quebec weren’t at all keen on vacating their homes to make way for the Great Whale project, but there’s excellent money in hydroelectric power. The California Indians did not ask to be enslaved by the Franciscans and forced to build that order’s missions.

What do Whites want? The answer is quite simple, and it’s been in plain sight all along. Land.

Whites want land.

Sure, Whites want Indians to disappear, and they want Indians to assimilate, and they want Indians to understand that everything that Whites have done was for their own good because Native people, left to their own devices, couldn’t make good decisions for themselves. All that’s true. From a White point of view, at least. But it’s a lower order of true. It’s a spur-of-the-moment true, and these ideas have changed over time. Assimilation was good in the 1950s, but bad in the 1970s. Residential schools were the answer to Indian education in the 1920s, but by the twenty-first century governments were apologizing for the abuse that Native children had suffered at the hands of Christian doctrinaires, pedophiles and sadists. In the 1880s, the prevailing wisdom was to destroy Native cultures and languages so that Indians could find civilization. Today, the non-Native lament is that Aboriginal cultures and languages may well be on the verge of extinction. These are all important matters, but if you pay more attention to them than they deserve, you will miss the larger issue.

The issue that came ashore with the French and the English and the Spanish, the issue that was the raison d’etre for each of the colonies, the issue that has made its way from coast to coast to coast and is with us today, the issue that has never changed, never varied, never faltered in its resolve is the issue of land. The issue has always been land. It will always be land, until there isn’t a square foot of land left in North America that is controlled by Native people.

At the Lake Mohonk conference in October of 1886, one of the participants, Charles Cornelius Coffin Painter, who served as a lobbyist for the Indian Rights Association, pointed out the obvious, that the treaties made with Native people had been little more than expediencies. In his talk, Painter quoted General William Tecumseh Sherman, who had said that treaties “were never made to be kept, but to serve a present purpose, to settle a present difficulty in the easiest manner possible, to acquire a desired good with the least possible compensation, and then to be disregarded as soon as this purpose was tainted and we were strong enough to enforce a new and more profitable arrangement.”

This is the same General Sherman who philosophized that “The more Indians we kill this year, the fewer we will need to kill the next.” Painter didn’t necessarily agree with Sherman, but he understood that the overall goal of removals, allotments, treaties, reservations and reserves, terminations and relocations, was not simply to limit and control the movement of Native peoples, but more importantly to relieve them of their land base.

Land. If you understand nothing else about the history of Indians in North America, you need to understand that the question that really matters is the question of land. Land has always been a defining element of Aboriginal culture. Land contains the languages, the stories and the histories of a people. It provides water, air, shelter and food. Land participates in the ceremonies and the songs. And land is home. Not in an abstract way. The Blackfoot in Alberta live in the shadow of Ninastiko or Chief Mountain. The mountain is a special place for the Blackfoot and friends on the reserve at Standoff have told me more than once that, as long as they can see the mountain, they know they are home.

For non-Natives, land is primarily a commodity, something that has value for what you can take from it or what you can get for it… The Alberta Tar Sands is an excellent example of a non-Native understanding of land. It is, without question, the dirtiest, most environmentally insane energy-extraction project in North America, probably in the world, but the companies that are destroying landscapes and watersheds in Alberta continue merrily along, tearing up the earth because there are billions to be made out of such corporate devastation. The public has been noticeably quiet about the matter, and neither the politicians in Alberta nor the folks in Ottawa have been willing to step in and say, “Enough,” because, in North American society, when it comes to money, there is no such thing as enough.

We all know the facts and figures. Carbon emissions from the production of one barrel of tar sands oil are eight times higher than the emissions from a conventional barrel. The production of each barrel of tar sands oil requires at least three barrels of fresh water, 90 percent of which never makes it back into the watershed. The waste water winds up in a series of enormous tailing ponds that cover some 50 square kilometres and is so poisonous that it kills on contact.

Yet, in spite of all the scientific evidence, oil corporations, with the aid and abetment of government, are expanding their operations, breaking new ground, as it were, and building thousands of miles of pipeline – the Keystone Pipeline, the Northern Gateway Pipeline, the Transmountain Pipeline – that will take Alberta crude from Fort McMurray to refineries and markets in the United States (Illinois, Oklahoma, and Texas) and in Canada (Kitimat and Vancouver)… there is little chance that North America will develop a functional land ethic until it finds a way to overcome its irrational addiction to profit. Unfortunately, there are no signs that that’s going to happen any time soon.

In 1868 the Lakota and the U.S. government signed a peace treaty at Fort Laramie which guaranteed that the Black Hills would remain with the Lakota Nation, and that the Powder River Country in north­eastern Wyoming would be closed to White settlement. However, just six years later, in 1874, an army expedition led by, of all people, George Armstrong Custer discovered gold in the Black Hills at French Creek and before you could say “Fort Laramie Treaty,” White miners swarmed into the Black Hills and began digging mines, sluicing rivers, blasting away the sides of mountains with hydraulic cannons and clear-cutting the forests in the Hills for the timber. The army was supposed to keep Whites out of the Hills. But they didn’t. A great many histories will tell you that the military was powerless to stop the flood of Whites who came to the Hills for the gold, but the truth of the matter is that the army didn’t really try.

The Fort Laramie Treaty still stands as a valid agreement and the Lakota have never given up their claim to the Hills, nor have they stopped fighting for the land’s return. So I can only imagine how they felt as they watched Six Grandfathers being turned into a national tourist attraction. Six Grandfathers is the mountain in the Hills that became Mount Rushmore after it was renamed for a New York lawyer in 1885.

Then in 1980, in United States v. Sioux Nation of Indians, the Supreme Court ruled that the Black Hills had been illegally taken. The solution, however, wasn’t to return the Hills to the Lakota. Instead the court instructed that the original purchase price of $25,000 plus interest be paid to the tribe. After the long addition was over, the total came to over $106 million.

$106 million. And as they had done in 1875, the Lakota refused the settlement. Money was never the issue. They wanted the Hills back. As for the money, it stays in an interest-bearing account to this day.

From a Native perspective, Indian land is Indian land. From a contemporary, somewhat legal North American perspective, Native land is land that belongs to the federal government and is on indefinite loan to a certain category of Native people. To say that these two views are in conflict is to state the obvious. Indian land as Indian land was certainly the idea behind early treaties and agreements.

One of the great phrases to come out of the treaty process is “as long as the grass is green and the waters run.” The general idea behind the phrase is not new. Charlemagne supposedly used such language in the eighth century, when he declared that “all Frisians would be fully free, the born and the unborn, so long as the wind blows from heaven and the child cries, grass grows green and flowers bloom, as far as the sun rises and the world stands.”

Great Britain, the United States and Canada, depending on how you want to count, signed well over 400 treaties with Native tribes in North America. I haven’t read them all, but none of the ones I have read contains the phrase. So, I’ve always wondered if “as long as the grass is green and the waters run” was ever actually used in a treaty.

I’m betting that poetic constructions such as “as long as the grass is green and the waters run,” “Great White Father,” and “Red Children” were part of the performances, the speeches and the oral promises that attended treaty negotiations and did not necessarily find their way into the official transcript.

Treaties, after all, were not vehicles for protecting land or even sharing land. They were vehicles for acquiring land. Almost without fail, throughout the history of North America, every time Indians signed a treaty with Whites, Indians lost land. I can’t think of a single treaty whereby Native people came away with more land than when they started. Such an idea, from a non­Native point of view, would have been dangerously absurd.

In fact, treaties have been so successful in separating Indians from their land that I’m surprised there isn’t a national holiday to honour their good work. But we could fix that. We could, if we were so inclined, turn Columbus Day and Victoria Day into Treaty Day. After all, Columbus didn’t discover America, and Queen Victoria never set foot in Canada… Of course, no one in Canada or the United States is going to support a holiday that isn’t a celebration of national power and generosity, so we’d have to disguise it, much the way we do Thanksgiving.

Now I don’t want to give anyone the impression that I think treaties are a bad idea. Treaties aren’t the problem. Keeping the promises made in the treaties, on the other hand, is a different matter.

One of the complaints that Whites have had about Aboriginal people is that they didn’t know what to do with land or that they weren’t using the land to its full potential. And North America has been quick to rally around the old aphorism “use it or lose it.” Ironically, Canada currently finds itself in a pseudo-Native position with regard to the far north. Knowing that the Arctic is a treasure trove of oil and gas, minerals and precious metals, and fish, the United States has been pushing jurisdictional boundaries, insisting that the Northwest Passage is an international waterway rather than a part of Canada. In 1969, the United States sent the S. S. Manhattan to sail into the Passage without first getting Canadian permission. In 1985, the U.S. icebreaker Polar Sea did the same thing. Nasty words flew back and forth. One solution to this problem that is being bandied about is to strike a treaty, wherein the United States recognizes the Passage as Canadian waters and Canada gives the United States the right to travel the waterway unimpeded.

A treaty with the United States. That should work out well. Lost in all of this gunship diplomacy was the 1953 saga of 87 Inuit who were moved from Port Harrison to Grise Fiord. The official reason Canadian bureaucrats gave for the move was that it would allow the Inuit to continue to live off the land and maintain their traditional ways. The unofficial reason was that Canada wanted to use the Inuit as placeholders in the continuing debate over who had territorial rights to the High Arctic and its resources. The government has always maintained that the families who relocated did so voluntarily, while the Inuit maintain that the moves were forced.

Wherever the truth lies, it is amusing to watch politicians validating Canada’s land claims in the far north on the backs of Aboriginal people. It’s ours, Ottawa tells the world. Our people are there. When it comes to the matter of land, one of the key questions is “What is the proper use of land?” This is both an historical and a contemporary consideration in Native rights. In the early days, hunting and gathering were seen as inferior uses of the land compared to farming. Where Indians did farm, their farming practices were considered inferior to those of Whites. And these days, heaven help the tribe or band that wishes to keep a section of land in its natural state when a golf course or a ski resort or a strip mine comes looking for a home.

Sometimes, a close reading of history is helpful in understanding the question of land and sometimes representative stories will do just as well. Personally, I prefer stories. And I happen to have several that you might consider.

Adapted from The Inconvenient Indian by Thomas King (Doubleday Canada). Reprinted with permission.

Leadership on climate needed

Portrait of David Suzuki

SCIENCE MATTERS by David Suzuki

• The race to become leader of the world’s most powerful democracy often seemed disconnected from reality. During debates, the two main candidates stooped to insults, half-truths and outright lies. The overall campaign included appallingly ignorant statements about women.

But the most bewildering disconnect was over the greatest threat the world faces: global warming. Republican candidate Mitt Romney only mentioned it mockingly and President Barack Obama brought it up in passing toward the end of the campaign and in one line during his acceptance speech… Obama has had more to say since being elected to his second term. “I am a firm believer that climate change is real, that it is impacted by human behaviour and carbon emissions and as a consequence I think we have an obligation to future generations to do something about it,” he told reporters at a post-election news conference.

He went on to list his accomplishments on climate during his first term: better fuel efficiency standards for cars and trucks, increased clean-energy production and investment in “breakthrough technologies that could further remove carbon from our atmosphere.” But those were inadequate, given the scope of the problem. He should have done more. As investment strategist Jeremy Grantham recently wrote in Nature, “President Barack Obama missed the chance of a lifetime to get a climate bill passed…”

Part of the problem is the increasingly dysfunctional nature of a polarized and paralyzed US political system, including a Congress dominated by anti-environmental, anti-tax and often anti-government Republicans. Many of us – not just Americans – hope the president will show stronger leadership this time around. Unfortunately, his news conference statement sent mixed messages. Although he acknowledged that more should be done and promised to have “a wide-ranging conversation…” about reducing carbon, he also said, “If the message somehow is that we’re going to ignore jobs and growth simply to address climate change, I don’t think anyone’s going to go for that. I won’t go for that.”

He went on to acknowledge the costs of climate-related natural disasters and mentioned the danger of climate change as “something we’re passing on to future generations that’s going to be very expensive and very painful to deal with.” In trying to say the right thing without alienating the fossil fuel industry and other moneyed interests, he came across as confused. Even though it will be expensive and painful not to act, he’s not prepared to take the necessary steps if it will impede jobs and growth. But climate change is already costing the US and the rest of the world – in money, human health and lives.

Because our leaders – in Canada and the US – have too long listened to fossil fuel interests and their denier minions rather than scientists, it will be more difficult than it might have been to reduce carbon emissions to the extent necessary to prevent runaway global warming (if it’s not too late already) and it may require more sacrifice than it would have, had we acted sooner. But there are many ways to protect the health of the planet and the future of humanity without destroying economies.

If America wants to retain its position as a global power, its president must listen to the people and show strong leadership at this turning point in human history.

Written with contributions from David Suzuki Foundation communications manager Ian Hanington. Learn more at www.davidsuzuki.org

TUsing less energy – The real alternative

by Jeff Rubin

Electric car

• How many once-in-a-century accidents have to happen before we recognize they’ve become the norm and not the exception? And if we accept them as the norm, what does that say about our relentless quest for more energy? We can’t continue to increase our energy consumption exponentially without expecting to pay ever-greater costs. Even as our attempts become more desperate, it’s easy to understand why we keep trying. When we stop finding new sources of energy, our economies stop growing.

Growth is the Holy Grail of modern societies. It’s the common denominator underlying nearly every action taken by corporations and governments. Whether it’s the sales manager at your local electronics store, the developer of a new housing project or a finance minister trying to close a huge budget deficit, each one prays at the altar of growth. Economic expansion comes in all shapes and sizes. It can be spotted in the building cranes above your city’s skyline, in the bustle of shoppers at the mall on a busy Saturday and in the freshly turned sod of a new subdivision. All of this activity feeds into Gross Domestic Product (GDP), the total measure of what a country’s economy produces each year.

Of course, growth also comes with a lot of costs. Without growth, we could stop building new highways for the burgeoning number of new vehicles that hit the road every year. We wouldn’t have to build more nuclear energy facilities or coal-fired power plants to meet our expanding electricity needs. We could stop our cities from sprawling into the countryside to make room for new suburbanites. And we could cut back on the amount of greenhouse gases we emit into the atmosphere.

For the economics profession, the notion of a world without growth is pure science fiction. While most economists now acknowledge that expensive energy curtails GDP, the majority also believe that technological innovations will allow us to leap over the hurdles presented by resource scarcity.

Historians take a different view. The decline of the Roman Empire has captured the world’s imagination for centuries, as have the collapse of Mayan society and the disappearance of people from Easter Island. Indeed, history is the story of the rise and fall of civilizations large and small. The exact reasons for social collapse are rarely known, but many theories cite resource scarcity as a contributing factor. Whether [or not] constraints on resources, such as food and water, is the driving reason behind societal failures will remain lost in the mists of time, but one thing is indisputable: civilizations that once flourished have eventually floundered. But most economists these days seem to have short memories. Viewed from the limited perspective of the post-war era, resource constraints and a scarcity of fossil fuels in particular appear to them to be no match for human ingenuity, which keeps finding ways to supply the world with more energy. However, rising resource prices are telling us that technological advancements are now coming up short.

We could hardly pick a worse time for higher energy costs to start squeezing the growth out of the global economy. The modern world counts on economic growth to support population expansion as well as satisfy the desire for higher incomes and all the extra things money can buy. Since the last recession, the need for GDP growth has become even more urgent. Economic growth will provide the financial wherewithal that allows governments to service the debts accumulated during that downturn. Right now, though, the global economy is discovering that chasing growth is a catch-22. Our countries need GDP growth to repay the debt acquired during the last oil price-induced recession, but achieving that growth will bring back the same high prices that killed growth in the first place.

Finding the energy to fuel our economies is no longer enough; we need that energy to be affordable. That’s why the oil industry is going to such lengths to tap the world’s resources. That’s why we’re changing dictatorial regimes in Libya, propping up an absolutist monarchy in Saudi Arabia, digging up pristine forests in northern Alberta and drilling beneath the icy waters of the Arctic Ocean.

In the United States, the Obama administration, which fined BP billions for the Macondo fiasco, is issuing permits for deepwater exploration in the Gulf of Mexico. I guess the White House is betting other offshore drillers will have better luck contending with the ultrahigh pressures at the bottom of the ocean. On the other side of the world, China is building new nuclear plants in coastal areas that are prone to the same magnitude of earthquake that caused the Fukushima disaster. Beijing is undoubtedly hoping for a luckier roll of the dice when the next seismic event occurs.

The choice currently being made by most politicians to simply to cross their fingers and hope for the best is hardly a sound way to deal with mounting energy costs. And in any event, the solution to higher energy prices won’t come from finding larger oil reserves or building more nuclear plants. Nor will it come from a technological breakthrough in renewable energy. We aren’t going to suddenly discover that solar panels or wind turbines hold a magic key that will power our economies. Instead, the solution to higher energy costs is quite simple: learn to use less energy. That doesn’t mean returning to the Stone Age. People in some countries, such as Denmark, live quite happily while also using a lot less energy.

The sooner more nations learn how to curb energy demand, the better it will be for everyone. In a world of energy scarcity, consuming more fuel comes at someone else’s expense. One country’s gain is another’s loss. It’s a pending reality that will affect how much oil everyone gets to burn from now on. And if you live in North America or western Europe, you can expect your fuel allotment to be much more modest than it’s been for the last few decades.

Over time, our economies will become greener and more efficient. That’s the hope, anyway. In the last forty years, we’ve made massive gains in fuel efficiency in places such as North America, Western Europe and Japan. But at the same time, economic growth and a rising global population have meant that our total energy consumption has become greater than ever before. And now emerging economic giants such as China and India are looking to claim a larger share of global energy supply. Hundreds of millions of Chinese and Indians are moving from rural lives, where they consumed sparse amounts of fuel, to energy-intensive urban lifestyles. As these folks fill up the gas tanks of their brand new cars and flip on light switches in their new apartments, how will the world keep pace with the fresh demand for energy?

One day, we may come up with a fuel alternative that will allow our energy consumption to increase by leaps and bounds. Renewable energy certainly has room to become a larger part of our power mix and thanks to technological advances, that’s exactly what’s happening right now.

Excerpted from The End of Growth by Jeff Rubin, copyright 2012 Jeffrey Rubin Enterprises Inc. Published by Random House Canada. Reproduced by arrangement with the publisher. All rights reserved.

Vancouver November 9: Talk and booksigning at UBC Robson Square Theatre, 7PM. Tickets $15 at Banyen Books/door, 604-732-7912. Victoria November 8: Jeff co-presents with David Suzuki, 7:30-9:30PM, Alix Goolden Hal, 907 Pandora Street, Victoria, 250-595-4232.

photo © Dariusz Kopestynski

The Bubble and Beyond

Fictitious capital, debt deflation and the global crisis

by Michael Hudson

• This summary of my economic theory traces how industrial capitalism has turned into finance capitalism. The finance, insurance and real estate (FIRE) sector has emerged to create “balance sheet wealth” not by new tangible investment and employment, but financially in the form of debt leveraging and rent-extraction. This rentier overhead is overpowering the economy’s ability to produce a large enough surplus to carry its debts. As in a radioactive decay process, we are passing through a short-lived and unstable phase of “casino capitalism,” which now threatens to settle into leaden austerity and debt deflation.

This situation confronts society with a choice either to write down debts to a level that can be paid (or indeed, to write them off altogether with a clean slate) or to permit creditors to foreclose, concentrating property in their own hands (including whatever assets are in the public domain to be privatized) and imposing a combination of financial and fiscal austerity on the population. This scenario will produce a shrinking debt-ridden and tax-ridden economy.

The latter is the path the Western nations are pursuing today. It is the opposite path that classical economists advocated and which Progressive Era writers expected to occur, given the inherent optimism of focusing on technological potential rather than on the political stratagems of the vested rentier interests fighting back against the classical idea of free markets and economic reforms to free industrial capitalism from the surviving carry-overs of medieval and even ancient privileges and essentially corrosive, anti-social behaviour.

Today’s post-industrial strategy of “wealth creation” is to use debt leveraging to bid up asset prices. From corporate raiders to arbitrageurs and computerized trading programs, this “casino capitalist” strategy works as long as asset prices rise at a faster rate than the interest that has to be paid. But it contains the seeds of its own destruction, because it builds up financial claims on the assets pledged as collateral – without creating new means of production. Instead of steering credit into tangible capital formation, banks find it easier to make money by lending to real estate and monopolies (and to other financial institutions). Their plan is to capitalize land rent, natural resource rent and monopoly privileges into loans, stocks and bonds.

This leads the banks to act as lobbyist for their rentier clients, to free them from taxes so that they will have more available to pay interest. The resulting tax shift onto labour and industry adds a fiscal burden to the debt overhead.

This is not a natural and even inevitable form of evolution. It is a detour from the kind of economy and indeed free market that classical writers sought to create. With roots in the 13th-century Schoolmen discussing Just Price, the labour theory of value was refined as a tool to isolate economic rent as that element of price that had no counterpart in actual or necessary costs of production. Banking charges, monopoly rent and land rent were the three types of economic rent analyzed in this long classical tradition. These rentier charges were seen as unnecessary and exploitative special privileges carried over from the military conquests that shaped medieval Europe. A free market was defined as one free of such overhead charges.

This classical view of free markets as being free of an unearned “free lunch” was embodied in the Progressive Era’s financial and tax reforms. But the rentiers have fought back. The financial sector seeks to justify today’s deepening indebtedness on the ground that it “creates wealth” by debt leveraging. Yet the banks’ product is a debt overhead, leaving debt deflation in its wake as debtors try to pay debts that can’t be paid without drastically reducing consumption and investment. A shrinking economy falls further into arrears in a debt spiral.

The question today is whether a new wave of reform will arise to restore and indeed complete the vision of classical political economy that seemed to be shaping evolution a century ago on the eve of World War I, or whether the epoch of industrial capitalism will be rolled back toward a neofeudal reaction defending rentier interests against reform. What is up for grabs is how society will resolve the legacy of debts that can’t be paid. Will it let the financial sector foreclose, and even force governments to privatize the public domain under distress conditions? Or will debts be written down to what can be paid without polarizing wealth and income, dismantling government, and turning tax policy over to financial lobbyists pretending to be objective technocrats?

To provide a perspective on the financial sector’s rise to dominance over the industrial economy, The Bubble and Beyond reviews how classical economists developed the tools to measure how finance now plays role that landlords did in Physiocratic and Ricardian theory: as beneficiaries of feudal privileges that oblige society to pay them for access to credit as well as land. As land ownership has been democratized, new buyers obtain credit to purchase homes and office buildings by pledging the rental income to bankers. About 80 percent of bank loans in the United States, Britain and other English-speaking countries are real estate mortgages, making land the major bank collateral. The result is that mortgage bankers receive the rents formerly taken by a hereditary aristocracy in post-feudal Europe and the colonies it conquered.

Whatever the tax collector relinquishes is available for this end. This has led the financial sector to subsidize popular opposition to taxing property – reversing the ideology of free markets held by the classical economic reformers. And with the financialization of real estate providing the post-industrial model, corporate raiders since the 1980s have adopted the speculator’s motto, “Rent is for paying interest,” using corporate cash flow to make a deal with their backers to obtain loans to take over companies already in place – and bleed them.

This phenomenon is called financialization, and my book describes how it has transformed the economics of real estate, industry and pension fund saving into a Bubble Economy based on debt-leveraged asset-price inflation – leaving debt deflation in its wake. The banker’s business plan, after all, is to turn as much of the economic surplus as possible into a flow of interest payments. But this must be self-defeating. Paying debt service diverts revenue away from being spent on consumption and tangible capital investment. This causes debt deflation and imposes financial austerity. Capital and infrastructure are bled to squeeze out the revenue to pay bankers and other creditors, depleting the economy’s reproductive powers.

What is unique to the post-1980 Bubble Economy is the tactic by which austerity has been averted, by new credit creation to inflate asset prices in what is rightly termed a Ponzi scheme. (The appendix at the end of this volume defines the terms and concepts by which I describe this process.) Instead of interest rates rising to reflect the increasing risks of the debt-ridden economy, banks kept the financialization process going by easing credit terms: lowering interest rates and the amortization rate (culminating in “interest only loans), and also lowering down payments (for zero down payment loans) and credit standards (appropriately called “liars’ loans”).

The direct effect of collateral-based lending is to bid up prices for the real estate, stocks and bonds pledged as collateral for larger and larger loans. An asset is worth whatever a bank will lend against it, and easier credit terms serve to preserve the market price of assets pledged for debt. This is the case even as the economy diverts more of its income – and transfers more of its capital and future income – to the financial sector, which concentrates wealth in its own hands.

Federal Reserve Chairman Alan Greenspan encouraged mortgage borrowers to think of themselves as getting richer as the market price of their homes rose in the early 2000s. But the “wealth creation” was debt-leveraged, and easy credit obliged new buyers to take on a lifetime of debt to afford housing. After 2008 their mortgages had to paid even as a quarter of U.S. residential real estate fell into negative equity when market prices plunged below the level of the mortgages attached to it.

A similar phenomenon has occurred as education has been financialized. Students must take on decades of student-loan obligations and pay them regardless of whether the education enables them to get jobs in an economy shrinking from debt deflation. The magnitude of these loans now exceeds $1 trillion – larger even than credit-card debt. Instead of being treated as a public utility to prepare the population for gainful work, the educational system has been turned into an opportunity for banks to profiteer from a debt market guaranteed by the government.

The economy’s circular flow becomes a vicious circle as paying debt service leads to smaller market demand for goods. Investment and employment are cut back, government budgets move into deficit, forcing cutbacks in revenue sharing with localities and subsidies for education. Schools raise their tuition levels, obliging students and families to take on more debt, creating yet more debt deflation.

Other public infrastructure is sold off to pay down debts, and the buyers raise access prices and tolls on roads and other privatized transportation – and so on throughout the economy. Debts mount up increasingly as a result of arrears in making payments, losing all relationship with the realistic ability to pay.

What has gone relatively unremarked by economists is how financialization of the economy has transformed the idea of saving. In times past, saving was non-spending on goods and services – in the form of liquid assets. Typically on a national scale, between one-sixth and one-fifth of income would be saved – and invested in capital on the other side of the balance sheet. But since the 1980s, as banks loosened lending standards on real estate and made and the financial sector in general turned increasingly to financing corporate raiders, mergers and acquisitions, the way to create future wealth was not to save, but was to go into debt. The aim was capital gains more than current income. Indeed, after 2001 many families “made more” on the rising market price of their homes than they made in salary (not to speak of being able to save out of their salary).

Under financialization, the strategy was to seek capital gains, riding the wave of asset-price inflation being fuelled by Alan Greenspan at the Federal Reserve Board. Investment performance was measured in terms of “total returns,” defined as income yield plus capital gains. And the way to maximize these gains was to borrow at a relatively low interest rate, to buy assets whose price was rising at a higher rate. For the first time in recorded history, large numbers of people went into debt not out of need, not involuntarily and as a result of running arrears as a result of inability to pay, but voluntarily, believing that debt leveraging was the quickest and easiest way to get rich!

The national income accounts were not designed to trace this process. Using debt leveraging to obtain capital gains meant that bank loans found their counterpart in debt on the other side of the balance sheet, not new tangible investment. The result was a wash. So the nominal savings rate declined – to zero by 2008. Yet people thought of themselves as saving, as long as their net worth was rising. That is supposed to be the aim of saving, after all: to increase one’s net worth. The result was a financial “balance sheet boom,” not the kind of expansion or business cycle that industrial capitalism generated.

As this process unfolded “on the way up,” financial lobbyists applauded the asset-price inflation for real estate, stocks and bonds as “wealth creation.” But it was making the economy less competitive, as seen most clearly in the de-industrialization of the United States. Debt-leveraged real estate required families to pay higher prices for housing – in the form of mortgage interest – and pension funds to pay higher prices for the stocks and bonds they buy to pay retirement incomes. That is the problem with the Bubble Economy. It is debt-driven. This debt is the “product” of the banking and financial sector.

When asset prices finally collapse to reflect the debtor’s ability to pay (and the falling market price of collateral bought on credit), these debts remain in place. The “final stage” of the Bubble Economy occurs when foreclosure time arrives and debt-ridden economies shrink into Negative Equity. That is the stage in which the U.S. and European economies are mired today. Economic jargon has called it a “balance sheet recession” – the counterpart to the “balance sheet boom” that was the essence of the preceding Bubble Economy.

The process became political quite quickly. Banks and high finance sought to shift their losses onto the economy at large. As debts went bad in 2008, Wall Street turned to the government for bailouts, and demanded that the Federal Reserve and Treasury take their bad loans onto the public balance sheet. This has occurred from the United States to Ireland. The effect was to increase U.S. federal debt by over $13 trillion – without running a deficit of this magnitude, but simply by taking Fannie Mae and Freddie Mac onto the public balance sheet ($5.3 trillion), by the Federal Reserve swapping $2 trillion in newly created deposit liabilities in a “cash for trash” swap with Citibank, Bank of America and other banks that were the worst offenders in making junk mortgages, and with other policies confined to the balance sheet, not current spending.

This vast increase in money and credit was not inflationary. At least, it did not increase consumer prices, commodity prices or wages. The aim was indeed to increase asset prices, but the banks were not lending, given the fact that debt deflation was engulfing the entire economy. So the traditional monetary formula MV=PT became irrelevant. Asset prices were the key, not prices for goods and services – and asset prices could not rise as long as so many assets were in negative equity. So money creation became a pure giveaway to the financial sector – a “transfer payment,” not a payment for the purchase or sale of a consumer good or investment good.

The Bubble and Beyond discusses the global dimension of “socializing” (or more to the point, oligarch-izing) unpayably high debts. The world’s money supply now rests ultimately on government debt – and the government’s acceptance of this debt as money in payment of taxes and public services. Yet there is something fictitious about all this: the debts can’t be paid!

The most obviously unpayable are those of the U.S. Government. This makes these debts “fictitious,” inasmuch as dollar holders are unable to convert their savings into tangible assets, goods or services. Gold convertibility was ended in 1971 in response to the Vietnam War’s drain on the U.S. balance of payments. Yet the dollar has remained the foundation of most central bank reserves even as the U.S. trade deficit deepened as the economy was post-industrialized while overseas military spending has escalated. This military dimension grounds the global financial system in U.S. military hegemony.

This has prompted the BRIC countries (Brazil, Russia, India and China) to seek an alternative payments and debt-settlement system so as not to base their international savings on a system that finances their military encirclement. As it stands the dollar standard provides a free lunch for the U.S. economy (“debt imperialism”), above all for its government to create money without regard for the ability (not to mention the will) to pay.

If the dollar deficit were used to promote peaceful economic development in an atmosphere of global disarmament, the rest of the world would be more willing to see the U.S. Treasury act as global money creator on its electronic computer keyboards. But when this is done for national self-interest that other countries see as being at odds with their own aspirations, the system becomes politically as well as financially unstable. That is the position in which the world economy finds itself today.

It became even less stable when the Federal Reserve provided $800 billion in credit to U.S. banks in 2011 under the Quantitative Easing (QE2), which the banks used to make easy money on international interest-rate and foreign currency arbitrage. Given the refusal of Congress to permit China or other countries to buy major American industrial assets (e.g., as when CNOOK was blocked from buying Unocal), and financial deregulation leading to decriminalization of financial frauds (as in the “toxic waste” of subprime mortgage packages), the world’s monetary system is in the process of fracturing into regional blocks.

What is not clear is what kind of regulatory, financial and tax philosophy will guide these blocs. At best, the world will return to the debates that marked economic discussion a century ago on the eve of World War I. At issue is whether the financial sector will translate its recent gains into the political power to take debt and financial policy out of the hands of elected government representatives and agencies and shift economic planning and tax policy into the hands of a super-national central bank authority controlled by bank lobbyists.

The lesson of history is that this would be a disaster of historic proportions, because the financial time frame is short-term and its business strategy is extractive, not productive. I hope the papers in this volume will serve as an antidote to the head start that financial lobbyists have achieved in sacrificing economies to austerity in what must be a vain attempt to pay debts under adverse financial conditions that make them less and less payable. By distinguishing tangible wealth creation from debt overhead and other rentier overhead – the task of classical political economy, after all – the policy debate can be cast in a manner that reverses the financial sector’s attempt to replace realistic analysis with euphemistic lobbying efforts and what best can be characterized as junk economics rather than empirical science.

Michael Hudson is President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City and author of The Bubble and Beyond (2012), Super-Imperialism: The Economic Strategy of American Empire (1968 & 2003), Trade, Development and Foreign Debt (1992 & 2009) and of The Myth of Aid (1971). ISLET engages in research regarding domestic and international finance, national income and balance-sheet accounting with regard to real estate, and the economic history of the ancient Near East. Michael acts as an economic advisor to governments worldwide including Iceland, Latvia and China on finance and tax law. He gives presentations on various topics at conferences and meetings. Google his many You Tube videos and listen to some of his radio interviews to hear his hyperspeed analysis of the geo-political machinations of global economics.


michael-hudson.com/overview-the-bubble-and-beyond/

NEWSBITES

First Nations to enforce ban on trophy bear hunt

First Nations on BC’s North and Central Coast have declared a ban on the trophy bear hunt in their traditional territories. “We will protect bears from cruel and unsustainable trophy hunts by any and all means,” says Kitasoo/Xaixais First Nation Chief Doug Neasloss. “The trophy bear hunt is an issue that has been brewing in First Nations communities for several years. Despite years of effort by the Coastal First Nations to find a resolution to this issue with the province, this senseless and brutal trophy hunt continues.

Jessie Housty, a councillor with the Heiltsuk Nation, says bears are often gunned down by trophy hunters near shorelines as they forage for food. “It’s not a part of our culture to kill an animal for sport and hang them on a wall. When we go hunting, it’s for sustenance purposes, not trophy hunting. Only a total ban on trophy hunting will ensure bear populations can support the tourism opportunities that add valuable income to our communities, says Housty. “Trophy hunting is a threat to the lucrative ecotourism industry that we are creating. Tourists often come back year after year to watch the same bears and their young grow.”

Because the province is negligent in its responsibility to monitor the trophy hunt, the Coastal First Nations will now assume responsibility for bear management on the Coast, Neasloss says. “We will now assume the authority to monitor and enforce a closure of this senseless trophy hunt.”


From Coastal First Nations Great Bear Initiative, www.coastalfirstnations.ca


Local eco-friendly Tiffin Project saves diners $$

A Vancity-backed social entrepreneur is launching Vancouver’s first attempt to tackle our eat-and-toss disposable container habits, while supporting local agriculture. The Tiffin Project’s container is a leak-proof metal unit that gets you discounts on meals at 10 restaurants and takeaways (and growing) in Vancouver, with plans for 17 in the next six months. It is made of food-grade stainless steel by Onyx Containers. The Tiffin Project (www.tiffinproject.com) reduces restaurant industry waste, supports local agriculture and aims to change the eat-and-toss culture using positive incentives and community.

A portion of the sale of all Tiffin Project containers goes toward shifting the initiative’s restaurant partners to improve their own eco-habits by acquiring more of their ingredients from local producers. By the fall harvest of 2013, the Tiffin Project Foundation Fund will give funds to participating restaurants to pay the difference between the current price of local produce and the current price of imported produce. For consumers, a Tiffin will be less costly and healthier and improve the community by reducing our food miles and supporting local agriculture.

Consumers buy in to The Tiffin Project by purchasing a $24 Tiffin from participating restaurants. They then receive discount incentives when they go to any participating restaurant or takeaway with their Tiffin.

Tiffin Project founder Hunter Moyes is a Vancouver-area chef who has been behind Burgoo, The Waldorf Hotel (Nuba) and most-recently Tacofino. He is also a food writer for Urban Diner, a sustainable seafood ambassador with the David Suzuki Foundation and a frequent partner of Oxfam’s Western Canadian campaigns. For more information about Onyx Containers, visit www.thetickletrunk.com


Proposition 37 naysayers litter radio ads with lies

The Yes on 37 California Right to Know Campaign has released a fact sheet documenting numerous falsehoods in the No on 37 campaign’s first radio ads, which ran in September.

“When voters hear campaign ads, we urge them to consider the credibility of the source and check the facts for themselves,” says Gary Ruskin, campaign manager for California Right to Know. “The same chemical companies that lied about the safety of Agent Orange and DDT are now financing the $32 million campaign to keep Californians in the dark about what is in their food. The No on 37 campaign’s first radio ad is a fitting tribute to this legacy because the only shred of truth it contains is in the disclaimer that lists the special interests who paid for it.”

Below are just a few of the false statements in the No on 37 campaign’s first radio ad:

False claim #1: Prop 37 was written by trial lawyers for trial lawyers.

Truth: The California Right to Know campaign began with the efforts of Pamm Larry, a former midwife, farmer and long-time Chico resident. In 2011, Pamm started organizing mothers and volunteers across the state toward a 2012 ballot drive with only one goal in mind – to let California consumers know if the food they are eating contains Genetically Modified Organisms (GMOs), which a growing body of peer reviewed research links to human health risks and environmental problems. With the help of thousands of volunteers across the state, the Right to Know campaign gathered nearly one million signatures from California voters within a 10-week period. The initiative itself was written by a group of industry, science and health experts.

False claim #2: Prop. 37 is being pushed by special interests.

Truth: Nearly one million individuals – parents, grandparents, business people, women, farmers, nurses and everyday Californians – helped to put Prop 37 on the ballot. Thousands of individuals have made contributions (most of them for less than $100) to support the Yes on 37 campaign. Prop 37 is endorsed by a broad coalition of more than 2,000 groups including farm, public health, environmental, food safety organizations and local businesses. By contrast, the No on 37 campaign is supported and financed entirely by special interests, most of which are not located in California. More than half the funding for No on 37 is from the six largest pesticide companies.

False claim #3: Prop. 37 bans genetically engineered foods.

Truth: Prop. 37 bans nothing. It merely requires labelling of GMO-containing foods with the phrase “partially produced with genetic engineering” or “may be partially produced with genetic engineering” and it gives companies 18 months to change their labels. This type of labelling is already required in 50 countries around the world. The No on 37 campaign’s largest funder, the Monsanto Company, even produced a series of ads in Europe touting the benefits of GMO labelling and the importance of consumers’ right to know. Yet here in California they are spending more than $7 million to defeat our right to know.


For more information and to support Proposition 37, visit www.carighttoknow.org


Fragile victory for Burns Bog

The Burns Bog Conservation Society is thrilled to announce the Government of Canada has joined 20,682 hectares of Lower Mainland wetlands into the newly renamed Fraser River Delta Ramsar Site. The new Ramsar site designation includes all of Burns Bog and affirms the area’s deep ecological significance to BC and the international community. Burns Bog is the southernmost and largest raised peat bog on the west coast of North America. It is located between the municipalities of Delta and Richmond in the Metro Vancouver area.

The new Ramsar site designation comes as the area is threatened by development proposals. This includes the South Fraser Perimeter Road and a rezoning application by MK Delta Lands Group. “As wonderful as the Ramsar designation is, it won’t stop the destruction of Burns Bog unless the federal government honours its commitments to the Ramsar Convention,” says Olson. Over 2,000 people have signed a petition to stop the development of 89 acres of unprotected bogland at Highway 91 and 72nd Avenue. Visit www.burnsbog.org to sign the petition.


From Burns Bog Conservation Society


Aftershock raises money for Haiti

Two years have passed since a catastrophic earthquake and more than 52 aftershocks ripped through Haiti. And yet not much has changed in this impoverished island nation. Only 8% of the ensuing two million tons of rubble have been cleared and communicable diseases are still rampant. Even before the quake, Haiti was one of the poorest countries in the western hemisphere. Now, it is quite possibly the poorest country in the world. Project Aftershock is dedicated to assisting medical relief efforts in Haiti through fundraising. www.projectaftershock.org