Canada Funds Private Armies in Afghanistan

Well once again it takes an American study to tell Canadians what the Harpocrites don't want us to know about their War in Afghanistan.

Canada spent more than $41 million on hired guns in Afghanistan over four years, much of it going to security companies slammed by the U.S. Senate for having warlords on the payroll.

Both the Defence and Foreign Affairs departments have employed 11 security contractors in Kabul and Kandahar since 2006, but have kept quiet about the details.

Now documents tabled in Parliament at the request of the New Democrats provide the first comprehensive picture of the use of private contractors, which have been accused of adding to the chaos in Afghanistan.

The records show Foreign Affairs paid nearly $8 million to ArmorGroup Securities Ltd., recently cited in a U.S. Senate investigation as relying on Afghan warlords who in 2007 were engaged in "murder, kidnapping, bribery and anti-Coalition activities."

Canadian Business Not Productive

Despite the tax cuts given to corporations by both the Liberals and Conservative governments, it has not translated into increased productivity, that is both technological innovation and job growth. So the Harpocrites latest national tour promoting Job Creation Through Corporate Tax Cuts, is all a dog and pony show, the facts don't meet the rhetoric. For five years tax cuts have not resulted in increased RD investment by corporations nor investment in technology upgrades, and of course few new jobs.

But hey if you don't believe me how about these guys:

Canada has made major public investments in research, primarily through universities, but private-sector innovation has remained relatively weak. The OECD ranks Canada as 16th in business spending on R&D as a share of the economy, despite having the second-highest level of government support for such investment. The overall policy and economic environment has become much more encouraging over the past decade. The marginal tax rate on new business investment has dropped sharply, making Canada more attractive internationally and opening a significant tax advantage over the United States.

Thomas d’Aquino and David Stewart-Patterson are the former chief executive and president and executive vice-president of the Canadian Council of Chief Executives and co-authors of the book Northern Edge: How Canadians Can Triumph in the Global Economy. Read more: http://opinion.financialpost.com/2011/01/25/unleashing-innovation/#ixzz1DCwwrEmV

And of course Bank of Canada boss Mark Carney regularly reminds us that corporate failure to invest results in lack of productivity. So why give them tax cuts, clearly it doesn't increase productivity or create jobs.

In fact continued tax breaks federally and provincially to Big Oil has had a negative impact on jobs in Canada.

A 2009 Industry Canada report found that 54 per cent of Canada's loss of hundreds of thousands of manufacturing jobs since 2002 is due to the oil sands boom replacing good, stable employment with short-term construction work in the tar sands and low-wage service sector jobs elsewhere in the economy. Canada has lost one-third of its post-war gains in value-added (manufactured) exports since 1999/2000, Canadian Auto Workers senior economist Jim Stanford told the Institute for Competiveness and Productivity in 2008.

The problem is not worker productivity, since workers in Canada are highly productive, its investment in actual technology.

The Canadian manufacturing sector employed more than 2.3 million people in 2002. By last September, manufacturers had shed some 580,000 jobs - more than one in four – and most of these losses occurred before the recession. There are few signs that this trend will reverse itself soon.

the fall in manufacturing employment was largely due to attrition, not layoffs. And one of the surprises of the recession is that manufacturing unemployment is now lower than it was before the recession – although this result was largely achieved by workers leaving the sector altogether.

But it’s a puzzle nonetheless: output per worker in the manufacturing sector has been increasing more than three times as fast as the economy as a whole. If productivity growth is the key to sustained prosperity, then shouldn’t manufacturing be increasing in importance?

Tax cuts have not created jobs, since corporations have used the break to accumulate capital which if invested at all is invested in the stock market and in mergers and acquisitions, not in workers wages, technology or pensions.

Corporations in this country are flush with cash and ready to grow.

"In some ways, corporate Canada has never been stronger than it is right now," Tal said.

"Better-than-expected profitability and a reluctance to spend in recent years has left Canadian businesses sitting on a record amount of cash and confident about the future.”

Swift and strategic downsizing during the recent recession paid off, Tal said. It allowed companies to withstand the downturn and ramp up hiring at a much faster clip than in the U.S.

In fact both private corporations and ironically our public pension fund the CPP have led the way in taking that capital and investing it abroad.

Foreign investment is a two-way street.

The Canada Pension Plan Investment Board and Onex took top honours for the biggest global private equity acquisition of the year with their $4.4-billion purchase of U.K. manufacturing giant Tomkins.

PricewaterhouseCoopers suspects Canadian companies will continue look past North America to emerging markets for better deals.

Last year, Canadians made major “buys” in nearly every continent with deals in the fourth quarter alone stretching to the Middle East, Asia and Africa.

“These transformational deals are beacons for what will become the norm for Canadian deal making going forward,” Knibutat said.

Joint ventures and minority purchases will also become more popular, it said. These deals allow companies to test drive sectors while minimizing financial and political risk, PricewaterhouseCoopers said.

“Organic growth prospects within North America remain limited, so for many well capitalized corporates and funds, M&A may be the best and only tool for growth,” Knibutat said.

A “perfect storm” of companies flush with cash, improved access to financing and lacklustre organic growth prospects means the M&A outlook is even brighter for Canada in 2011.

Global public companies have an estimated $3 trillion in cash reserves. Private equity firms hold another $500 billion.

Competitive tensions stemming from strong takeover demands are likely to entice sellers back in the market and that should create a more balanced number of buyers and sellers, PricewaterhouseCoopers said.

All this means Canada will likely continue to outpace the globe when it comes to M&A activity, buoyed by a well-capitalized financial system, strong dollar and leadership in hot deal sectors.

So rather than calling corporate tax cuts job creators, we should call a spade a spade; all that tax cuts do is reduce government revenue, social capital, while giving corporations more capital. Tax cuts are public funding of private profits, without having shareholder benefits. Tax cuts are corporate welfare.

A broad look at how corporate tax rates have changed Canada in the past suggests the impact of the small cuts planned for this year and next is marginal for most companies.

The larger impact is on the government's bottom line, not the corporate bottom line — even though corporate taxes have now become key in determining whether there will be a spring election.

Indeed, federal Finance Department documents show that the reduction of corporate income tax — from 18 per cent in 2010 to 16.5 per cent in 2011 and then to 15 per cent in 2012 — will be expensive for any government battling a deficit. The cost is about $1.6 billion in foregone revenue in the 2011-2012 fiscal year, $3.9 billion the year after, and a total of more than $10 billion over three years.

Quit Your Tweeting Over UBB Challenge the Teleco Monopolies

While thousands of Canadians blogged, tweeted and set up internet petitions about the CRTC's User Based Billing (UBB) decision this week, methinks they protest too much, or at least have missed the real issue. As Michael Geist points out; The widespread use of bandwidth caps in Canada is a function of a highly concentrated market where a handful of ISPs control so much of the market.

The fact is that the Canadian marketplace is dominated by oligopolies; the big Telco's and Cable operators. They already overcharge us for cell phone use as well as internet access. You are already getting gouged even before the CRTC ruling!

Canada’s largest telecoms don’t want to say how much it costs to deliver a gigabyte of bandwidth and have refused to disclose such data, arguing that information is both proprietary and competitively sensitive. They also argue that it’s difficult to calculate the specific cost of delivering bandwidth since the cost varies based on the technology being used, the user’s location and the time of day.

Read more: http://business.financialpost.com/2011/02/05/how-much-does-bandwidth-actually-cost/#ixzz1DCl3hPBl

Of course they don't because as studies have shown we are charged more for our use of these "public utilities" then any other countries. And the reason is that these oligopolies make a profit off of service charges.

It’s 2010 and Canadians pay the highest cell phone bills in the world

Surveying more that 50 developed and developing countries where information is available, one country comes out on top when it comes to the most revenue extracted per subscriber on a monthly basis. And that country is of course Canada. What you are looking at here are the world rankings of mobile ARPU (Average Revenue per User). To you and me ARPU is your monthly bill, before GST/PST/HST etc. (through taxes and high spectrum license fees, our government is culprit here too)

This data is total bill including both voice and data. Canada does not have the highest proportion of data to voice charges though data usage in Canada is growing fast (we’re finally catching up after a late roll-out of 3G compared to many countries). Interestingly, Canadians are estimate to pay slightly less per minute of voice (10 cents vs 11 cents) on average than our nearest neightbour the U.S.. What is really driving bills in Canada over the top are the egregious fees like system access fees (the fees many plans still pay whether you access the system or not in a month), and especially “value pack” fees like 15$ a month for the luxury of call display and handful of voice mails

Now remember when they say that they have legacy costs, those costs are transmission lines, satellite connections, etc. Things that we the taxpayers have invested in. Telus was originally a government of Alberta phone company and it bought our city owned telco; Edmonton Telephones. So its legacy costs are the direct result of being a public utility. The Canadian government satellite program is used by telecos to transmit GPS signals, as well as broadband and mobile phone transmissions. So how come we get charged as if these companies had actually spent some money on this infrastructure.


Instead of protesting over UBB folks should be pissed off that the telecos and cable companies are gouging us using our public airwaves, and our legacy infrastructure and then charging us for it. The right wing likes to talk about how competiton will decrease prices, but that is not the case when the market is dominated by oligopolies who set base prices. While some would say its time for the CRTC to go, I would contend that since there is little interest in nationalization of these public utilities, that we direct the CRTC to set real rates based on the global market prices. Our protests should be over the costs we are charged not for usage but for service fees. Service fees should be eliminated, just as ATM and Bank charges should be.

No Cops No Violence Egyptian Self Organization

When you line up rows and rows of riot cops, they have to have something to do. So when you have cops at demonstrations you inevitably have violence. Whether it was the recent G8 G20 meetings in Toronto or last Fridays rally in Liberation Square in Egypt, riot cops present attacked the protesters.

But once the Egyptian security forces were routed and forced off the streets of Cairo, and these are not merely riot cops, they are Gestapo like security forces, rather than violence and chaos, contrary to the media headlines, something new occurred. The demonstrations were peaceful, self organized.

A carnival atmosphere was reported until last Wednesday when these same cops, plus the criminals they let out of prison to intimidate the Egyptian masses, led pro government attacks on the demonstrators. By Friday the carnival atmosphere in Liberation square returned.

People are engaging in Potlach and Potluck, bringing food, drinks, blankets, medical supplies to share with their neighbours in Liberation square.In Liberation square the people have set up hospitals, latrines, and they clean up after themselves.

When the police left the neighbourhoods open to the criminals and thugs they released from prison, Egyptians organized neighbourhood self defense committees. The media call these vigilantes, but they are not, they are classic forms of anarchist self organization. Neighbours old, young, men, women, Christian, Muslim, have met each other and helped each other.

This is Anarchy in its truest form. The people organizing themselves, without the need of leaders. And there is no violence, the only violence comes from the State, trying desperately to hold on to power. The state needs chaos, it thrives on it, in order to justify the need for police.

But without the State or the police the people organize themselves for themselves.Just as the revolutionary proletariat in Spain did in the Thirties and the Russian people did in 1917.

If CNN and the internet had existed in 1917 the early days of the Russian Revolution or in Spain in 1936 the beginning of those revolutions would have looked like Cairo.

The New Proletariat and the Coming Revolution

While students protested government increases in tuition and cuts to Education in Britain, the youth revolt has spread to the Middle East. The proletariat is no longer just blue collar, white collar or pink collar workers, it includes the mass of unemployed and underemployed educated youth who have embraced the calls to freedom to lead the seismic shift that is occurring around the world and in Egypt and the Middle East in Particular.

"In most Arab countries, a majority of the population is under 30, and unemployment rates are exceptionally high for young workers, who are the most likely to rebel," economist Chris Lafakis of Moody's Analytics said in a report today, as masses gathered in Cairo's Liberation Square and Jordan's King Abdullah sacked the government amid mounting street protests. "In Egypt and Saudi Arabia, almost 90 per cent of unemployed workers are under 30," Mr. Lafakis said. "As evidence of the risk of revolution contagion, Syria's president has already signaled that he will push for more political reforms. The events in Egypt could also spark unrest in Sudan, a politically unstable country where demonstrations are already occurring and citizens have voted to partition the country."

I have been saying for years on this blog that two groups not often considered part of the classic definition of the proletariat, but in fact are, are women and youth.

Now we see with the revolt in Tunisia and now Egypt that unemployment and rising food prices have brought out both women and youth to demonstrate against the dictators who run their countries. In Europe and North America young people face democratic governments but the same crisis of capitalism, where the governments are now demanding austerity measures, cuts to public services, to pay for bailing out the capitalist corporations and banks.

'From sacking lollipop ladies and closing youth clubs to axing college grants and trebling tuition fees, this is a government at war with our young people and therefore at war with our future. It is betraying an entire generation,' said general secretary of the (British) University and College Union, Sally Hunt.

In Canada the youth unemployment rate is double the national average, and it is increasing not decreasing. The annual unemployment rate for youth in Canada is 14%.

And while more women are in the workforce than ever before they are older, not younger women.

Employment among women aged 25 and over increased in January (+55,000), with gains for both the 25 to 54 and 55 and over age groups.Over the past 12 months, however, employment growth for women was concentrated among those aged 55 and over.

In the U.S. it is even higher and adds to further high unemployment stats amongst blacks and Hispanics.

Youth unemployment rates in all categories is an average of 18% in the United States, approaching Egyptian and Tunisian levels, but joblessness among young African-Americans and Hispanics are among the highest in the world. This poses a future political problem for the world’s richest nation.The US Department of Labor report in December 2010 broke out unemployment and participation rates into three categories: White unemployment is 8.5%, or below the national average of 9%; African-American is 15.8% and Hispanic at 13%.

Everyone compared the meltdown of 2008 to the Great Depression, and they were right, however the bail out of the banks and corporations to save capitalism from itself has not resolved the contradiction that this has been again another global jobless recovery. The very soul of the Great Depression was not the collapse of Wall Street but the mass global unemployment crisis of capitalism. That same crisis is with us today despite the bailouts!

Global economic growth is on the rebound but the labor market continues to disappoint with 205 million people unemployed in 2010, according to a UN report. The number is not expected to improve much this year. Labor markets in Europe, Africa and South America are struggling to recover from the crisis that hit them in 2008. Europe's young people under 25 are facing an especially difficult situation. The youth unemployment rate is now at a record level of 21%.

Read more: http://www.businessinsider.com/10-most-unemployed-countries-2011-2##ixzz1DCVJVEkP

So why have not seen mass protests in North America like those that have occurred in England, Europe and now the Middle East? Because despite mass unemployment, neither the Harper nor Obama governments have brought in austerity programs like the Cameron government has. The austerity measures which have been introduced in Ireland, Greece, Spain, etc. have led to mass protests and have failed to actually resolve the continuing crisis of these Capitalist states.

Once the Harper and Obama governments begin to cut, slash, reduce, freeze, public sector spending then we will see a rage amongst youth that will make the tea party look like well a tea party.

The bail out of capitalism has not solved the crisis of capitalism, it can't. And using the tired old neo-liberal solutions of slashing government spending, which is social capital, will not succeed as the Cameron government has found out.

Furthermore unlike North America, which produces food for export, those importing food are facing a constant inflationary battle. A battle which leads to mass protests.

A recent Economist piece gives insight into the pressures felt:

Outside America, food has a bigger share than energy in consumers’ shopping baskets—and thus in inflation too (see chart). In developing countries, rising food prices can be a human as well as an economic disaster. In Asia in early 2008 a spike in the price of rice led to widespread unrest and desperate attempts by governments to secure more supplies. In December in India, for example, food prices rose at an annual rate of 14%, and there has been a run on onions, a dietary staple. Read more: http://www.businessinsider.com/global-macro-notes-the-deflationists-are-still-in-it-to-win-it-2011-1#ixzz1DCZFkdFo

The crisis is not over, it is spreading, and youth unemployment and rising food prices, are needed for capitalism to function, no different than has been since Marx wrote about it over 150 years ago.