NORTEL: REDUX

Would the last one out of Nortel please turn off the lights.

What do white collar workers, brain workers as Kropotkin called them, have in common with blue collar workers, well they are both workers. Regardless of job descriptions or titles, or share offerings or pension plans, or if they drink beer or latte's, those that work in the IT or High Tech industries have faced the came contradictions of capitalism's boom and bust that manufacturing workers have faced. Those that have professional degrees, from univeristies, forget that tradesmen are also professionals, whose degrees come from post secondary institutions as well. The Scientist or Engineer is no different than any other skilled tradesman.

Those who work in skilled and semi-skilled industries are no different than those working in code, software, game design, web work, engineering or automation design. When it comes to the bottom line they are workers and they are expendable as our contuing coverage of the Nortel saga shows. The impact of the Nortel layoffs of thousands of workers over the last five years has directly impacted on Canada's declining productivity as has the thousands of jobs cut in manufacturing.

As the Ottawa Citizen reports the story of the Nortel workers and their working lives is a story that couild be told by laid off auto workers, or even Wal-Mart workers, public sector workers, liqour store workers, etc. Work is work, regardless of the pay or perks. And you either own the means of production or you don't. If you don't you are a wage slave who works for a living. The chains of capitalism bind all workers together, regardless of the collars.

"When the employer pays the engineer twenty times more than the workman, he makes this very simple calculation: if an engineer can save him £4,000 a year in cost of production, he will pay him £800 a year to do it. And if he sees a foreman is a clever sweater and can save him £400 in handicraft, he at once offers him £80 or £90 a year. He expends £100 where he counts upon gaining £1,000; that is the essence of the capitalist system. And the like holds good of the differences in various trades.

Where then is the sense of talking of the cost of production of labor force, and saying that a student who passes a merry youth at the University, has a right to ten times higher wages than the son of a miner who has pined in a pit since he was eleven? Or that a weaver has a right to wages three or four times higher than those of an agricultural laborer? The expenditure needed to produce a weaver is not four times as great as the necessary cost of producing a field worker. The weaver simply benefits by the advantageous position which industry enjoys in Europe as compared with parts of the world where at present there is no industrial development."

Peter Kropotkin, The Wages System

The storyfrom the Ottawa Citizen, which is now a subscriber based news service, may 'disappear' becoming a story for paying customers only. In order to avoid this I have reproduced this very long feature here. As it ties into our story Nortel; Canada's Enron.

Safe landings:
Ottawa's tech workers were soaring five years ago,
but tens of thousands have since fallen to earth,
struggling to find work

Peter Hum
The Ottawa Citizen

Thursday, March 10, 2005

Some of the happiest messages in Jim McQuaid's e-mail box arrive with the subject line: "I've landed." In the past few years, he's received hundreds of them, from different senders, some of whom he barely knows.

They may be strangers, but McQuaid and his e-mailers share a common plight. The downturn derailed their tech careers, and they sought support at the Kanata Kareer Group. "I've landed" e-mails were the messages that everyone wanted to send -- the subject line was code for "I've found a job."

McQuaid, an ex-Nortel Networks employee and leader among the volunteer forces that support Ottawa's out-of-work techies, likes the metaphor.

"The analogy is of a parachute, forever in descent mode," he says, "passing opportunities such as job postings and interviews, and dodging things like family matters, financial problems, emotional distress -- but not able to grasp onto anything meaningful.

"'I've landed' means the person has come to a place where they are no longer looking -- floating -- for work. It's the ultimate 'I made it alive' e-mail."

It's easy to keep extending the analogy. After the Internet revolution of the 1990s, techies were indeed soaring into the new millennium, borne aloft by hopes for a golden telecommunications age. By the Nasdaq's measure, many of their companies were flying highest five years ago today, when the stock quotation system's index shattered its records on March 10, 2000. Tech businesses were flying business-class -- that is, until the bubble burst, and it was time for tens of thousands to pull the rip cords.

In Ottawa, according to Statistics Canada, tech employment peaked in May 2000 at 72,400. Untold layoffs since have forced that number to drop. It stood at 45,600 earlier this year, for a net loss of nearly 27,000 jobs. That's a lot of parachutists.

More often than not, they had been doing challenging, creative work that they loved, working in excellent teams for good and sometimes great remuneration. Some, like McQuaid, put in decades for Nortel or another employer before a devastating tap on the shoulder came.

When the downturn took away their jobs and scorched their prospects of new employment, they developed far different routines from the long hours they were accustomed to logging at their offices.

Those with substantial savings or connections to funding, as well as entrepreneurial spirit, began their own companies -- technology-oriented or otherwise. Many of Ottawa's startups are phoenixes rising from the ranks of Nortel's cast-offs.

Others fired countless resumes into the void, even as the sector that had employed them shriveled, with companies large and small failing. They lived more frugally and racked up credit.

Many dug into retirement funds to survive. When tech jobs eluded them, they joined self-help groups. They became consultants or carpenters, coffee shop employees or chess teachers. Or stay-at-home parents.

The last five years, a wild ride from boom to bust that only now shows glimmers of recovery, have been harrowing for some, transformative for many, and testing for all. Now is a good time for those who have landed, and those still floating, to look back.

The layoffs at Nortel four years ago affected executives as well as rank-and-file workers, as entire units and projects were axed. Many executives and their staff quickly caught startup fever.

Among them were 13 Nortel engineers who formed Seaway Networks in January 2001 after discovering their project was about to be cut. The engineers quit to pursue the project, and Nortel gave up intellectual property rights to their work in exchange for equity in Seaway.

Natural Convergence was created in April 2001, three days after its founders David Cork and Mark Murray, Nortel eXtremeVoice unit executives, lost their jobs. They put $250,000 into their startup, a voice-over-Internet-Protocol software play, before landing venture funding.

The founders of Trigence, a server application company, took their Nortel buyouts in 2001.

"We were all 100-per-cent career Nortel people," says Brian Hurley, CEO and co-founder of the high-performance server startup Liquid Computing, and another ex-Nortel executive. "We had many opportunities during the years to leave Nortel, and we had consciously decided to stay with Nortel and make it a full-time, life-time career."

Other jobless techies have lit out on their own with fledgling businesses.

Peter Szmyt worked at a succession of software companies -- Simware, Jetform, AIT and finally Eftia OSS Solutions -- before being laid off in May 2002. During his job search, he was frustrated by having to visit website after website, looking for job postings. He looked for a service that collected fresh job notices from comapny websites. "I didn't find one. So I made one," says Szmyt, 39.

In September, he started his free e-mail list, Peter's New Jobs. In May 2003, he began charging. Now, more than 1,200 people looking for work in Ottawa and Toronto subscribe to petersnewjobs.com. He plans to expand his coverage to other cities.

After Linda Pond lost her sales and marketing job at Plaintree Systems, she started her company, Customer Connects, meant to assist startups network and reach customers and suppliers. "Things are going in the right direction," she says. "I need to put my full energy into this."

DOT-COM Memories

No one needs to tell Rob Woodbridge how much energy running a business requires. Five years ago, he was the president of GetHOW, a Byward Market startup that made digital, downloadable how-to videos for manufacturers and retailers. Now, at 34, he's on the other side, running the Ottawa Capital Network for the Ottawa Centre for Research and Innovation, a middleman between entrepreneurs and investors.

GetHOW was formed in the fall of 1999 and its founders recruited Woodbridge, already an Internet business veteran.

Woodbridge fondly recalls the days of dot-com mania. "It was buoyant, joyous. It was the funnest time to be an entrepreneur. It was the most ridiculous time. It was absolutely exuberant, energizing," he says.
In February 2000, he attended an Internet startup bootcamp in California, thrown by garage.com, the famed, self-styled investment fund for new-economy startups. "It was a drastically different time. People would tell stories about financing. It was like a religious revival. I get embarrassed thinking about it," Woodbridge says.

As 2001, progressed, everything changed. "I remember meeting with an angel investor on the morning the TSX plummeted 800 points," he says. Potential investors submitted increasingly onerous term sheets, demanding returns of three times their investment before anyone else was paid, and more clout on GetHOW's board.

After Sept. 11, critical funding dried up, and Woodbridge shut down GetHOW. "I woke up one morning and said to my wife, 'For the very first time, I have no work.'"

The backlash against dot-coms was profound. WhileWoodbridge's resume once proudly noted that he had been a dot-com CEO, he soon thought better, deciding to bury the detail. "Nobody would want to take a risk on an entrepreneur. It was like being an entrepreneur was a disease, and they didn't want that liability."

He worked at Systemscope as an e-business strategist in 2002 until the job at OCRI came his way. "I'm working with the people in the investment community that slammed the door in my face when I was asking for money. Now that I'm on the other side, I can understand why, and what was wrong with GetHOW," he says.

"Guys like me -- those who survived it -- will be much better suited, much better business owners than if we had not gone through it."

In his basement, he still has mementos of those dot-com days -- paperwork, master copies of products, mousepads and t-shirts and stickers for cars. "My wife always asks me when I'm going to throw it out. I just can't let it go," he says.

There are other GetHOW remnants too -- outstanding bills, loans and legal fees. Still, he may yet run a business again. "Ultimately, I think I am an entrepreneur," he says. "For now, I'm still employed. I might go back to being self-employed."

Tough for Consultants

Most laid-off techies who are self-employed have likely been reborn as consultants. They have not had it easy.

Al Quirt has been a consultant since June 2001, after Nortel cancelled its Optera Packet Core project and the jobs that went with it. "I was quite bitter for a time. I think I pretty much got over that," Quirt says.

Quirt, who is in his 60s, was eligible for early retirement and a decent pension. But his job search was fruitless. "I've found that your resume doesn't show 70 hours a week of coding for the last three years, that you're not getting hired," Quirt says.

Consulting has so far yielded meagre returns. He contributed sweat equity to several startups, but they folded without paying anyone. He has only seen revenue come in the last three months. Quirt may turn to technical writing, helping small companies improve their user manuals.

Natasha D'Souza is trying to balance tech consulting with motherhood.
Five months' pregnant when her contract work at Infineon ended in January 2003, she began looking for work before the year ended, when her son, Aquila, was about six months old. She looked for a year. "The market was dead," says D'Souza, who previously worked at Newbridge Networks and Neutronics Components.

After some "soul-searching," she has recast herself as a consultant, hoping to help tech firms with sales, marketing and project management -- sometimes with Aquila in tow. She meets clients on the one day a week Aquila is in daycare. But he has attended meetings with his mother, in between playtime, meals and quiet time.

"I have to juggle 100 different balls at the same time," D'Souza says. Fortunately, she has full support from her husband, Denis Rheault, a hardware designer at Alcatel who kept his job throughout the bust.

But D'Souza adds: "I can't go full-speed ahead because baby No. 2 is due in May."

McQuaid's Landing

Consultant Jim McQuaid was able to send his "I've landed" e-mail last month, but only after considerable hardship and struggle. He was a 26-year veteran at Nortel when he was first laid off in December 1999. "I was devastated. My world as I knew it came to an end. I fully expected to be there when I retired," McQuaid says. He didn't know then that he would be laid off three more times in the next five years.

The buoyant tech economy of 1999 meant that McQuaid was not out of work long. Within a few days, he found work at CrossKeys Systems, and expected to be with the company for a long time, but his job ended a year later. He remembers telling his spouse: "In the next 10 years, I'll probably work at 10 companies."

He was jobless for four months before 10 months of consulting for Certen/Bell. After four more months out of work, he joined Nuvo Network Management for three months as a service manager before being laid off yet again.

No wonder he and his peers have "retired the words 'permanent job.' That concept doesn't exist anymore. When a company's profits drop, they'll let people go almost at the drop of a hat," McQuaid says.

The Kanata Kareer Group and Ottawa Talent Initiative, two resources for out-of-work techies, kept him busy and happy as he spent half of 2003 and all of 2004 out of work. "Networking encourages you to be up. You're meeting people every day. You're shaking hands. You're among your peers."

He looked into starting a small business, perhaps an Internet cafe. "I came really close to giving up on tech," McQuaid says. "But I needed to be in a tech environment." He was unemployed for nearly two years before he won a 22-week Nortel contract earlier this year.

McQuaid survived by extending his credit and selling off RRSPs. Without his Nortel contract, he would have looked into selling his house and other assets.

"I know some who have lost everything, sometimes lost their families," he says. "Most people are living on savings, living on RRSPs. Their retirements are going to be a lot different than what they imagined it would be."
His Nortel bosses have told him: "'This is forever. You could die here,'" he says. He pauses and laughs: "I hope they meant a while from now."

Enjoy the Day

For McQuaid, tenacity has been crucial. It has served Miladin Djerkovic well too -- he began working again last month at JDS Uniphase, his former employer, after 2 1/2 years looking for work.

Djerkovic came to Canada from Yugoslavia in 1994 as a refugee, fleeing civil unrest. Trained in mechanical engineering at the University of Belgrade, and with three years of experience in his homeland, he looked down at Ottawa from the plane and had a bad feeling about his job prospects.

"I didn't see any factory chimneys. Where there are polluted environments, this is where mechanical engineers thrive," he says -- only half-joking.

He and his wife Jovanka, also a mechanical engineer, were also confronted with a more immediate hurdle before they could find work. They had to learn English. They attended ESL classes and made friends in Ottawa. Djerkovic, a passionate, master-strength chess enthusiast, played in tournaments in Ottawa, Montreal and Toronto.

In June 1997, Djerkovic joined JDS Uniphase, where, among other tasks, he designed packaging for fibre-optic devices and tools and devices for product lines.

During his five years at JDS, his personal life was filled with milestones. In 1998, he and his wife became Canadian citizens. That year, his chess ranking peaked. Among thousands of registered chessplayers, Djerkovic was ranked 21st in Canada. Two years later, in the fall of 2000, he and his wife bought a house. A month later, Jovanka gave birth to their son, Bogdan.

After surviving cut after cut, Djerkovic lost his job in August 2002.

"All of sudden, you have nothing to do," he says. His wife, who had found retail work in 2001, brought home paycheques while Djerkovic stayed home with their son. "You take a deep breath and you learn to cope," he says. "After the first two months, I accepted it as a new reality."

He sent hundreds of resumes, cared for Bogdan, and made a bit of money by giving chess lessons privately and in schools.

This year, he was one of more than 140 people applying for a six-month position at JDS. But this time, he had an edge. "The people that worked there knew me," he says. "The job description exactly matched what I was doing before."

At the interview, concerns arose that Djerkovic would be rusty after 2 1/2 years out of work. He replied that his memory was still very good -- for example, he was able to remember six chess games simultaneously "blindfolded," keeping track of every move on all the boards in his head. He told them of an exhibition that he gave, winning five of six games -- and he was hired.

"Chess came to the rescue!" Djerkovic says.

His first week back at JDS, Djerkovic was plagued with insomnia each night, caught up with the excitement of working again. "The second time," he says, "I really get to appreciate it. I have this special little willingness to do my best."
He doesn't know what he will be doing seven months from now.

"I have no clue," he says. "I enjoy the moment, enjoy the day.

"Maybe that's the wrong attitude, but it helped me go through those 2 1/2 years without a job."

Renouncing Tech

Other tech workers could not stick out the tech job search.

They include Jana Chytilova, an Ottawa freelance photographer who took many of the pictures for this article. Before making her hobby her profession, she spent 15 years at Bell Northern Research and then Nortel.

"It was a hell of a transition," she jokes. "Anything that's a non-high-tech salary is a hell of a transition."

Fresh from engineering studies at Queen's University, Chytilova started at BNR as a power converter designer. She moved into training and organizational development, and then to process development at Nortel.

Five years ago, Nortel rewarded her performance with a free five-day cruise out of Florida and into Mexico. Six months after, she was laid off. "I remember sitting in the exit interview, just totally stunned."

She tried for a year to find tech work -- "not even a nibble," she says. Soon, the photography enthusiast was freelancing her pictures to newspapers.

Her tech past recedes in her memory. "I have my stuff on Workopolis, but I haven't updated it in a couple of years. I don't want to be hitting my head against a brick wall."

She misses the steady pay, benefits and good working conditions at Nortel, but not the stress. If someone were to offer her a tech job tomorrow, she's not sure she would take it. "The longer you're away from it, the less you miss it," she says.

"There's such a bitter aftertaste, with everything that happened financially," she adds. "I'm still as mad today as I was when I was laid off, at how they drove the company into the ground, and they did it at the cost of the employees."

Bogdan Buziak made a similar switch from software developer to carpenter.

In May 2000, after earning his computer science degree from Algonquin College, he joined Zucotto Wireless, a promising downtown startup that developed Java IP cores for cellphones.

"I liked the company and the atmosphere. It was a pretty exciting place," he says. But he adds: "People worked too much... to the point it was kind of trendy to be called a workaholic."

He was laid off in late 2001 -- to his surprise. While Buziak collected employment insurance, he looked, fruitlessly, for tech work. A mountain-lover, he moved to Canmore, Alta., nestled in the Rockies. There, after working as a carpenter for a few months, he put tech behind him. "I realized I was much happier doing that than what I was doing at Zucotto," he says.

Carpentry is in his blood. His father is a carpenter. He worked at carpentry while growing up in Poland, and during summers in Canada. Now, he has three employees.

He says his tech detour was not a waste of time. "It was a good experience... that helped me establish my own business."

But he adds: "It also taught me not to be loyal to a corporation - the minute things go bad, the corporation is not loyal to you."

Coffee Breaks

Some of Ottawa's premier coffee shops owe their success to ex-techies.

Francesco's Coffee Company, in Westboro, is run by former software developer Pietro Camino, 34. In June 2000, Camino went to work as a test verification engineer at Silicon Access Networks, an Ottawa network processor company which after raising more than $120 million U.S. ranked among Ottawa's top three startups.

"I thought to himself, I should be in this emerging market segment," Camino remembers. "There was a belief in the information superhighway coming to rescue us and create unequalled wealth. Like most people, I thought it was the place to be."

Camino's first six months at Silicon Access were "magical." His salary had jumped $30,000 from his last job. "Everybody at the company was visiting Audi dealerships, everybody was buying houses," he says. Pampered with "out-of-this world" perks, Camino "thought this was the new age of employee-employer relations."

After a while, the perks were cut. So too were staff -- once, twice. Salaries were slashed by 10 per cent. Camino was laid off in June 2002. Silicon Access eventually died. "You would never dream that your company would run out of money. It boggles my mind," he says.

Jobless, Camino took the summer off and went sailing each day. He babysat his parents' Kanata home. Then, he sunk $90,000 of savings and inheritance into opening a coffee company modelled after his grandfather's business in Italy. "I had to find something I could stand to do," he kids. "A good, relaxing, low-stress thing to do. Roast coffee, bag coffee, run a little coffee shop."

Since his April 2003 opening, Camino has hired 10 employees and seen his revenues quadruple. "I was meant to do business. I'm having the time of my life." Being laid off was "a good excuse to get started," he says.

Still, he can't quite get Silicon Access out of his mind. "With the $90,000 out of pocket I invested (in Francesco's), we probably had higher revenues than Silicon Access had with $128 million U.S. (in invested capital). What would I do with $128 million U.S.? We would be a multinational. We would be making money hand over foot."

One of Camino's employees is Tim Dudley, a veteran of Nortel and Cognos. As Camino's director of sales, Dudley "single-handedly built up the wholesale side of the company," his boss says.

"I knew nothing formally about sales, but I persuaded a lot of people to throw money at a lot of things when I was at Nortel," says Dudley, 63. Trained in computer science in the United States, he moved to Ottawa in 1970 to work for BNR. Between 1974 and 2001, he spent 17 years at Nortel and a decade at Cognos.

At Nortel in the late 1990s, Dudley, a user-interaction specialist, was at odds with the go-go company culture. "I was very conscious about not working overtime. I wanted to keep in touch with my family. I hadn't completely sold out. This is not my life. This is what I'm doing to support my life."
Laid off just before Christmas in 2000, he exhausted his severance package for a year and then looked for work. Two years passed, and he was still jobless. He went through almost all of his RRSPs.

Dudley lives near Francesco's, and was impressed with the coffee. He and Camino hit it off, and Camino put him to work in the fall of 2003. "I kind of thought, 'This guy could sell, eh?'" Camino says.

"After three years of not getting any work, I basically re-invented myself," Dudley says. "My strength is people, I'm honest, and I really like the product. I'm selling it because I think they should taste it and enjoy it.

"High-tech stuff is very very cold, very left brain, very isolated," he adds. "Instead of encouraging people to cocoon and avoid human interaction, I really enjoy the idea of encouraging people to socialize."

Another convert from tech to coffee is Trevor May, 40.

He joined Zucotto Wireless in August 2000, when it was on the upswing, en route to becoming a 160-employee company. Like Buziak, he enjoyed his job, but grew concerned about Zucotto's sustainability. An alumnus of two other startups, he estimated that Zucotto's optimal revenues would still fall far short of what it needed. "It was an order of magnitude off. It was 10 times off," he says.

May quit in the summer of 2002. "It finally had become just a job. I wasn't interested in anything that was just a job," he says. Zucotto folded the following spring.

Disillusioned with tech after 15 years in the field, May returned to school, earning an executive MBA degree at Queen's University. "I thought if I'm really going to be a success, I should do it in a disciplined, structured way."

He also began building and selling high-end guitar amplifiers to discriminating musicians like himself.

As the operations support manager at Bridgehead, May finds his work varied and exciting. He's negotiating leases for new sites and planning growth. On the tech side, he built an online ordering system that saves three days of accounting every month. He'll be wielding a hammer when the next Bridgehead shop is built.

"I don't miss it (tech) at all," May says.
© The Ottawa Citizen 2005

Libertarian Dialectics

It's not often that you find amongst the Canadian Libertarian Right, the few and the brave that actually read Murray Rothbard or Sam Konkin III. That was until I came on this blog ; Godscopybook the other day with a reference to Rothbard and Dialectical Libertarianism. But alas he does not get it either, falling into that Southern Ontario Libertarianism that loves to rant and rant and rant against their strawman of Socialism.

Of course having not read broadly enough, they mistake Social Democracy, and the Liberal State for Socialism. In this case Godscopybook neo-liberal ideology has failed to even availed himself of a good read of William Godwin's Social Justice. How can you be a "new liberal" or "classical" liberal as the right wing libertarians call themselves, without benefiting from reading the father of Anarchist Utilitarianism. They are not libertarians but neo-liberaltarians.

And this is where the Rand influenced Libertarian Right falls down, they have a narrow focus and a distorted definition of socialism, communism, anarchism and libertarianism. That they lack a historical materialist interpretation of the world is simply a given being they come from the 'disritributive'(prices, value, profit) school of Austrian Economics of Von Mises and Hyaek. Philosophically this German classical economics is of the Schiller school, predating even Hegel, the idealist philosophy of the bourgoies striving to be the artistocracy.

Godscopybook hates the idea of a working class, with true aristorcatic individualistic pretension he rants against class, and class struggle. But empirical reality always comes back and slaps the right wing in the face. There cannot be capitalism without class struggle, it is what makes capitalism function. But of course this is the 'labour' theory of value, of Marx and modern political economy. The autaric capitalism of the idealists, denies labour any value beyond the Hegelian dialectic that the slaves shall serve.

Luckily there were right wing libertarian scholars like Rothbard and Konkin that divorced themselves from the Randian formula long enough to study dialectics. They had read Godwin and laced it well with the Hegelian Anarchist philosophy of Max Stirner. Sam Konkin and I both being from Edmonton, used to coorespond over the years, and his passing last year leaves a hole in the Libertarian Anarchist mileu. What is interesting is that both he and Rothbard refered to themselves as anarchists and as the New Left of the right wing Libertarian movement in the U.S.

And such is the case of Chris Sciabarra, who was influenced in his dialectical thinking by Murray Rothbard on the right and Marxist libertarian Bertell Ollman. For this precious little find I thank godscopybook, and just say, one more step neo-liberaltarian to be a dialectical anarchist.



Chris M. Sciabarra
Chris Matthew Sciabarra has been a Visiting Scholar in the Department of Politics at New York University since 1989. His previous publications include Ayn Rand: The Russian Radical (PSP, 1995), Marx, Hayek, and Utopia (SUNY, 1995), and Feminist Interpretations of Ayn Rand (edited with Mimi Reisel Gladstein, PSP, 1999).


A PRIMER ON MURRAY ROTHBARD
by Chris Matthew Sciabarra
Let me start by saying what this article is not. It is not going to be a place to debate Murray Rothbard’s anarchism. Or his stance on foreign policy. Or his various, changing stances on libertarian strategy. (In fact, all of these stances put together constitute a very small fraction of the totality of his thought.) Suffice it to say, I had and have profound differences with Rothbard. But there comes a point at which it is important to express one’s own appreciation: Murray Rothbard was one of my mentors and made a crucial impact on my own intellectual development. And, quite frankly, he was a teacher to many, many libertarian writers—including those who, today, are among his fiercest critics.

I discuss my own relationship with Rothbard in an essay entitled "How I Became a Libertarian":

While an undergraduate, I met Murray Rothbard. I was a founding member of the NYU Chapter of Students for a Libertarian Society. We got Rothbard to speak before the society several times. I struck up a cordial relationship with Murray, and learned much from my conversations with him. He was a real character, very funny, and quite entertaining as a speaker. When I went into the undergraduate history honors program, Murray gave me indispensable guidance. ... In later years, I don’t think Murray was too thrilled with some of the criticisms I made of his work, but he was always cordial and supportive. I’m only sorry that Murray didn’t live to see my published work on Rand, which greatly interested him, or my Total Freedom, which devotes half of its contents to a discussion of his important legacy.

TOWARD A DIALECTICAL LIBERTARIANISM
Total Freedom
Toward a Dialectical Libertarianism
December | 2000 | 6 x 9 inches
Penn State Press

Philosophy, Philosophy - History
Hardback: $70.00 short | 0-271-02048-2
Paperback: $27.00 short | 0-271-02049-0

Building upon his previous books about Marx, Hayek, and Rand, Total Freedom completes what Lingua Franca has called Sciabarra's "epic scholarly quest" to reclaim dialectics, usually associated with the Marxian left, as a methodology that can revivify libertarian thought. Part One surveys the history of dialectics from the ancient Greeks through the Austrian school of economics. Part Two investigates in detail the work of Murray Rothbard as a leading modern libertarian, in whose thought Sciabarra finds both dialectical and nondialectical elements. Ultimately, Sciabarra aims for a dialectical-libertarian synthesis, highlighting the need (not sufficiently recognized in liberalism) to think of the "totality" of interconnections in a dynamic system as the way to ensure human freedom while avoiding "totalitarianism" (such as resulted from Marxism).



AYN RAND: THE RUSSIAN RADICAL

THE CENTRAL THESES
ABSTRACT FROM NON SERVIAM: NON SERVIAM #17

Contents:

* Editor's Word
* Chris Sciabarra: Ayn Rand: The Russian Radical

Editor's Word

"Stirnerism" exists as a part of many intellectual movements; Anarchists have their Stirnerite fringe, there tend to be some who love Stirner in every libertarian circle, and Stirnerites often hang out with Objectivists, as they are the only other ones who do also speak warmly about selfishness.

Stirnerite thought is, though, a fringe minority view in these movements, and - while acknowledged - is seldom integrated into the dynamics of these movements' rhetoric. The lesson is recognized, but not learned.

When Chris M. Sciabarra told me a year ago about a book he was writing, Ayn Rand: The Russian Radical, where he sought to establish Rand's intellectual and philosophical roots in Russian dialectical thinking, that immediately struck me as both a profound insight, and an opening for an approach from Objectivism to "Stirnerism".

Of particular interest I find his statement that the dialectical heritage, as taken up by Rand, is one where mere interpretation of the world is not enough. Philosophy must have as its end a praxis. Mapping this back to Germany of one and a half century ago, this fits better into the thoughts of the rebellious young Hegelians than into the "purer" dialectics of the old Hegelians. So I invited Dr. Sciabarra to write a piece for Non Serviam about the central theses of his book, the results of which appear below. And well, as a little sales plug, I can mention that his book will be available this August [1995] from Penn State Press.

Dr. Sciabarra is a Visiting Scholar in the New York University Department of Politics, and has previously authored Marx, Hayek, and Utopia. Have an enjoying read and a good summer! -- Svein Olav Nyberg



LINGUA FRANCA, (September 1999): 45-55.
The Heirs of Ayn Rand: Has Objectivism Gone Subjective?

Scott McLemee

"When Ayn Rand died in 1982, she left devotees squabbling for control of her intellectual empire. Today, the Objectivist movement is threatened not just by its internal schisms but also by its surprising new popularity in the academy. Can the Objectivists save their guru from the professors they despise?"

In the article, McLemee traces the history and significance of the philosophy and movement of Objectivism. He concentrates on what he calls its three successive crises: the first entailing the Rand-Branden schism, and its subsequent detailing in the writings of Barbara Branden and Nathaniel Branden; the second entailing the Kelley-Peikoff split; and the third brought about by the publication of Chris Matthew Sciabarra's Ayn Rand: The Russian Radical. Sciabarra's book was a grand "challenge to 'proprietary' Objectivism," McLemee writes. A libertarian, Sciabarra was stimulated by Bertell Ollman's work on Marx. As his mentor, Ollman encouraged Sciabarra to examine "the methodological and substantive parallels between Marxian and free-market thought." McLemee observes: "Sciabarra was amazed to find that Ayn Rand, too, was a dialectician. So were other libertarian theorists!" Tracing the integration of dialectics and libertarianism "became an epic scholarly quest" for Sciabarra, a project that led to the publication of his Russian Radical, "which set out a drastic reinterpretation of [Rand's] intellectual development and the structure of her system." With successive printings and thousands of copies sold, the "work acknowledges the importance of free-market economic thought for Rand, as well as her sense of a deep continuity between Objectivism's philosophical anthropology and Aristotle's. But [Sciabarra] insists that Russian culture was the strongest and most pervasive influence on [Rand's] vision, especially the culture of the early twentieth century (extending into the first years of the Communist era) when avant-garde movements like symbolism and futurism joined Hegelian and Nietzschean philosophical currents to generate a cultural renaissance. Sciabarra was particularly intrigued by Rand's enthusiastic memories of having studied classical philosophy with N.O. Lossky -- a titan of Russian thought who sought to overcome dualisms such as materialism / idealism and empiricism / rationalism through a grand system of markedly organicist and teleological bent."

Warren Buffet: U S Capitalism in Crisis

The Berkshire Hathaway Corporation Annual Report 2005

Foreign Currencies
Berkshire owned about $21.4 billion of foreign exchange contracts at yearend, spread among 12 currencies. As I mentioned last year, holdings of this kind are a decided change for us. Before March 2002, neither Berkshire nor I had ever traded in currencies. But the evidence grows that our trade policies will put unremitting pressure on the dollar for many years to come – so since 2002 we’ve heeded that warning in setting our investment course. (As W.C. Fields once said when asked for a handout: “Sorry, son, all my money’s tied up in currency.”)

Be clear on one point: In no way does our thinking about currencies rest on doubts about America. We live in an extraordinarily rich country, the product of a system that values market economics, the rule of law and equality of opportunity. Our economy is far and away the strongest in the world and will continue to be. We are lucky to live here.

But as I argued in a November 10, 2003 article in Fortune, (available at berkshirehathaway.com), our country’s trade practices are weighing down the dollar. The decline in its value has already been substantial, but is nevertheless likely to continue. Without policy changes, currency markets could even become disorderly and generate spillover effects, both political and financial. No one knows whether these problems will materialize. But such a scenario is a far-from-remote possibility that policymakers should be considering now. Their bent, however, is to lean toward not-so-benign neglect: A 318-page Congressional study of the consequences of unremitting trade deficits was published in November 2000 and has been gathering dust ever since. The study was ordered after the deficit hit a then-alarming $263 billion in 1999; by last year it had risen to $618 billion.

Charlie and I, it should be emphasized, believe that true trade – that is, the exchange of goods and services with other countries – is enormously beneficial for both us and them. Last year we had $1.15 trillion of such honest-to-God trade and the more of this, the better. But, as noted, our country also purchased an additional $618 billion in goods and services from the rest of the world that was unreciprocated. That is a staggering figure and one that has important consequences.

The balancing item to this one-way pseudo-trade — in economics there is always an offset — is a transfer of wealth from the U.S. to the rest of the world. The transfer may materialize in the form of IOUs our private or governmental institutions give to foreigners, or by way of their assuming ownership of our assets, such as stocks and real estate. In either case, Americans end up owning a reduced portion of our country while non-Americans own a greater part. This force-feeding of American wealth to the rest of the world is now proceeding at the rate of $1.8 billion daily, an increase of 20% since I wrote you last year. Consequently, other countries and their citizens now own a net of about $3 trillion of the U.S. A decade ago their net ownership was negligible.

The mention of trillions numbs most brains. A further source of confusion is that the current account deficit (the sum of three items, the most important by far being the trade deficit) and our national budget deficit are often lumped as “twins.” They are anything but. They have different causes and different consequences.

A budget deficit in no way reduces the portion of the national pie that goes to Americans. As long as other countries and their citizens have no net ownership of the U.S., 100% of our country’s output belongs to our citizens under any budget scenario, even one involving a huge deficit.

As a rich “family” awash in goods, Americans will argue through their legislators as to how government should redistribute the national output – that is who pays taxes and who receives governmental benefits. If “entitlement” promises from an earlier day have to be reexamined, “family members” will angrily debate among themselves as to who feels the pain. Maybe taxes will go up; maybe promises will be modified; maybe more internal debt will be issued. But when the fight is finished, all of the family’s huge pie remains available for its members, however it is divided. No slice must be sent abroad.

Large and persisting current account deficits produce an entirely different result. As time passes, and as claims against us grow, we own less and less of what we produce. In effect, the rest of the world enjoys an ever-growing royalty on American output. Here, we are like a family that consistently overspends its income. As time passes, the family finds that it is working more and more for the “finance company” and less for itself.

Should we continue to run current account deficits comparable to those now prevailing, the net ownership of the U.S. by other countries and their citizens a decade from now will amount to roughly $11 trillion. And, if foreign investors were to earn only 5% on that net holding, we would need to send a net of $.55 trillion of goods and services abroad every year merely to service the U.S. investments then held by foreigners. At that date, a decade out, our GDP would probably total about $18 trillion (assuming low inflation, which is far from a sure thing). Therefore, our U.S. “family” would then be delivering 3% of its annual output to the rest of the world simply as tribute for the overindulgences of the past. In this case, unlike that involving budget deficits, the sons would truly pay for the sins of their fathers.

This annual royalty paid the world – which would not disappear unless the U.S. massively underconsumed and began to run consistent and large trade surpluses – would undoubtedly produce significant political unrest in the U.S. Americans would still be living very well, indeed better than now because of the growth in our economy. But they would chafe at the idea of perpetually paying tribute to their creditors and owners abroad. A country that is now aspiring to an “Ownership Society” will not find happiness in – and I’ll use hyperbole here for emphasis – a “Sharecropper’s Society.” But that’s precisely where our trade policies, supported by Republicans and Democrats alike, are taking us.

Many prominent U.S. financial figures, both in and out of government, have stated that our current-account deficits cannot persist. For instance, the minutes of the Federal Reserve Open Market Committee of June 29-30, 2004 say: “The staff noted that outsized external deficits could not be sustained indefinitely.” But, despite the constant handwringing by luminaries, they offer no substantive suggestions to tame the burgeoning imbalance.

In the article I wrote for Fortune 16 months ago, I warned that “a gently declining dollar would not provide the answer.” And so far it hasn’t. Yet policymakers continue to hope for a “soft landing,” meanwhile counseling other countries to stimulate (read “inflate”) their economies and Americans to save more. In my view these admonitions miss the mark: There are deep-rooted structural problems that will cause America to continue to run a huge current-account deficit unless trade policies either change materially or the dollar declines by a degree that could prove unsettling to financial markets.

Proponents of the trade status quo are fond of quoting Adam Smith: “What is prudence in the conduct of every family can scarce be folly in that of a great kingdom. If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.”

I agree. Note, however, that Mr. Smith’s statement refers to trade of product for product, not of wealth for product as our country is doing to the tune of $.6 trillion annually. Moreover, I am sure that he would never have suggested that “prudence” consisted of his “family” selling off part of its farm every day in order to finance its overconsumption. Yet that is just what the “great kingdom” called the United States is doing.

If the U.S. was running a $.6 trillion current-account surplus, commentators worldwide would violently condemn our policy, viewing it as an extreme form of “mercantilism” – a long-discredited economic strategy under which countries fostered exports, discouraged imports, and piled up treasure. I would condemn such a policy as well. But, in effect if not in intent, the rest of the world is practicing mercantilism in respect to the U.S., an act made possible by our vast store of assets and our pristine credit history. Indeed, the world would never let any other country use a credit card denominated in its own currency to the insatiable extent we are employing ours. Presently, most foreign investors are sanguine: they may view us as spending junkies, but they know we are rich junkies as well.

Our spendthrift behavior won’t, however, be tolerated indefinitely. And though it’s impossible to forecast just when and how the trade problem will be resolved, it’s improbable that the resolution will foster an increase in the value of our currency relative to that of our trading partners.

We hope the U.S. adopts policies that will quickly and substantially reduce the current-account deficit. True, a prompt solution would likely cause Berkshire to record losses on its foreign-exchange contracts. But Berkshire’s resources remain heavily concentrated in dollar-based assets, and both a strong dollar and a low-inflation environment are very much in our interest.

If you wish to keep abreast of trade and currency matters, read The Financial Times. This London-based paper has long been the leading source for daily international financial news and now has an excellent American edition. Both its reporting and commentary on trade are first-class.

* * * * * * * * * * * *

And, again, our usual caveat: macro-economics is a tough game in which few people, Charlie and I included, have demonstrated skill. We may well turn out to be wrong in our currency judgments. (Indeed, the fact that so many pundits now predict weakness for the dollar makes us uneasy.) If so, our mistake will be very public. The irony is that if we chose the opposite course, leaving all of Berkshire’s assets in dollars even as they declined significantly in value, no one would notice our mistake.

John Maynard Keynes said in his masterful The General Theory: “Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.” (Or, to put it in less elegant terms, lemmings as a class may be derided but never does an individual lemming get criticized.) From a reputational standpoint, Charlie and I run a clear risk with our foreign-exchange commitment. But we believe in managing Berkshire as if we owned 100% of it ourselves. And, were that the case, we would not be following a dollar-only policy.

Blog Freedom or Cyber War

Peace Order and Good Government reports that an Iranian blogger just got 14 years in jail for bloging.

Meanwhile in the USA home of the bloggers, a CNN Poll says most Americans are unfamiliar with blogs. "More than three-quarters of Americans -- 76 percent -- said they use the Internet, but only 26 percent said they were "very familiar" or "somewhat familiar" with blogs.Just 7 percent of adults said they read blogs at least a few times per week, according to the CNN/USA Today/Gallup poll. Forty-eight percent said they never do."

From the blogs online the predominance is from the right, with a minority of left wing sites. This is a specifically American phenomena, a strong libertarian republican right wing that are nerds and geeks. Ayn Rand always did appeal to the geek engineer crowd. But they are still a minority just a vocal and visible one.

And when it comes to freedom of speech even in blogs , what Americans take for granted, the rest of us have to fight for.

But is blogging anything more than a flash in the pan. In the world of the Internet this is the 15 minutes of fame.

As Michael Geist writes in yesterdays Toronto Star Say no to Big Brother plan for Internet

"Notwithstanding the Internet's remarkable potential, there are dark clouds on the horizon. There are some who see a very different Internet. Theirs is an Internet with ubiquitous surveillance featuring real-time capabilities to monitor online activities. It is an Internet that views third party applications such as Vonage's Voice-over-IP service as parasitic. It is an Internet in which virtually all content should come at a price, even when that content has been made freely available. It is an Internet that would seek to cut off subscriber access based on mere allegations of wrongdoing, without due process or oversight from a judge or jury." Michael Geist is the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa.

And who are these villans, that would create a commercial surrveliance state on the WWW? Well both corporations like Nortel and the State.

The State, whether it is Iranian, American, Turkish, Canadian, the EU or Britain, China, or Russia, is clearly opposed to real free speech that the Internet represents. It will continue to try and restrict the WWW and drive it into commercial only access and intelligence monitoring.

But the web is resilient if nothing else, as the success of WYSIWYG proves. For it is the ability to use java coding and WYSIWYG that eliminates the cumbersome use of HTML for webpages that has given life to blogging. Instant web pages.

And the web has created a cyber dialectic with its own brand of counter intelligence, hacks and hackers. As well as the counter corporate campaigns like those against Nike or in support of stirkes half a world away.

But increased use of the judiciary, laws, and the legislative power of the State
can still restrict access and control to the web.

The increasing commercialization of the web is a serious threat to free speech in its own right. The ability to link to news stories which is a key element in blogging, is being limited as more and more News sites go to subscriber only e commerce. A link like the one above may disappear soon, within seconds, minutes or a day.

Which will simply force more and more blogs to actually archive and keep the stories they comment on rather than relying on links. This is why you wil find actual stories on my blogs rather than just links.

The blog is the revival of what H.P. Lovercraft called the Amatuer Press, and what is now known as the Age of Pulp Fiction 1920-1940. It also coincided with the Surrealist movement in art and literature. As A. J. Leibling said at the time : "Freedom of the press is guaranteed only to those who own one"

And today with computers and the WWW, bloging and webpages are the Free Press of the cyber age. It is our responbisiblity as (cyber) citizens to keep it so. There is a cyber war going on between Military Intelligence, the State and the Corporations against the citizens on the web, the new Civil Society.

Canada Says No To Star Wars Jr.

John Gibson of FOX Calls Canada Dumb.
Quissling Canadian Ezra Levant Agrees.

Tweedledumb and Tweedledumber Defend the Defenseless

Ezra Levant Watch blog reports:
"Poor Ezra Levant has been driven completely mad by Canada's decision not to sign onto the US missile defense program. Ezra begins robustly and rambunctiously enough; that by not signing up to a missile defense program that doesn't work when Canada has other defense priorities more current than 1964, Canada is reducing its standing in the world, and will end up like once-mighty Belgium. (Belgium again.)"

Oh Ezra you cut me to the quick , nope sorry that was a paper cut.

Our very own right wing quisling Ezra (ranter) Levant is rushing about all verklempt about the failure of Canadians to be, wait, for it, DUMB.

Nope we did not sign on to the Americans Missile Defense system, Star Wars Jr. it’s just another American billion dollar scam to keep the Military Industrial Complex in cash. (1)

Despite unifying the Reform/Alliance Party with the Progressive Conservatives Ezra’s brand of Canadian Republican Lite tossed the baby out with the bath water. The Progressives left a sinking ship and the right got what it wanted, a tired old Tory party no different from your daddy's Tory party. And during the election they looked, well like a bunch of Tories, talk from the right run from the centre.

And the winners in the election were Canadians who got a Minority Government of Liberals who moved left to match the NDP and BQ. Three left parties got the majority of seats in the house. The left opposition in the House of Commons is as strong as Her Majesty's Official Opposition. And so Canadians won.

Stephen Harper and his Tories had to call for tax cuts for ordinary Canadians and not just his corporate pals, call for rollbacks in EI for "workers" as well as employers. Yep he choked on those words but he had to say it, the Left rules.

When faced with an ill timed announcement that we are part of the US missle defense plan the PM finally made a decision, to NOT join Star Wars Jr. No more Mr. Dithers.

And Harper and pals had already flipped flopped on Missile Defense back in September. They dropped missile defense like a hot potato, despite being her majesties loyal opposition, because, wait for it, it didn't seem to work.

Yep two Missile tests, two failures, ah American Technology, no wait they probably outsourced the work, quick alert Lou Dobbs!!!

Only an ideological anachronism like Ezra doesn't get it because the facts don't fit his dogma.

John Gibson at Fox Bashes Canada

When it comes to not supporting Star Wars Jr., he claims we are DUMB. We are dumb to expect the Americans not to be upset because we rejected their offer of a free fully paid for missle defense system whether we wanted it or not. We are dumb for expecting Condeleza Rice to do her job and not be petulant because we don't support Star Wars Jr.

Well those who support Americas FAILED missile defense system are dumber. Dumb American Right Winger, Dumb, Dumb and Dumber, there, I got that off my chest.

John how quickly you forget, that the Axis of Evil you refer to was concocted by CANADIAN David Frum, speech writer for George Jr. Of course you don't forget that fact you just chose to ignore it, like you do with the fact your missle system is a failure. F A I L U R E.

David Frum like Ezra is another Right thinking Canadian and the rest of us are flaming socialists, which is why he ran away from home to be with you.

When it comes to Star Wars Jr., maybe you should have hired Industrial Light and Magic instead of the Pentagon Contractors Association. Hey John can you say DUD. That's what the American Missile Defense system is. Pentagon experts, being boys with toys figure its all about missiles.It was a Republican Presidential Candidate that informed us that America suffered from ED. Now the Pentagon is proving it with its Missile system that is a DUD!

What’cha gonna do John declare a boycott of Canadian Beers, opps sorry we own Coors now. Stop investing in Canadian money markets, nope not at 25 cents on the dollar. The majority of your merchant banks have been sold to Canadian banks. And you already closed the market to our beef, and use illegal taxation on our softwood lumber and steel exports.

Taxation, damn it man, taxation the very cause that created FOX News and the Regan Republicans was tax cuts, damn it man at least be consistent. What hypocrites you talk free trade, talk tax cuts, and what do you do violate the WTO rules every chance you get. You don’t walk that talk.

Taxing softwood lumber is an attack on Canada, tax steel, again illegal, and you attack us, Japan and Europe. Free Trade indeed. And you call us friends and neighbours, sorry neighbors, boy I'd hate to see how you treat your enemies, nope seen that too. Those you don't invade you cuddle. Keep your enemies closer I guess is part of that my enemies enemy foreign policy.

In North America of the three Amigos, Canada is the largest economic engine of trade for US markets. But we are off your radar map. And speaking of radar maps while centralizing all NORAD command under US control, was an arbitrary decision so of course you should pay for it, in more ways than one.

And speaking of NORAD it sort of fell down on the job during 9/11. So NORAD failed, your missile defense system failed, your intelligence agencies failed, twice; before 9/11 and in the build up to the Iraq war. Aren’t you the country with the “Three Strikes” laws?

No John we don’t tremble in fear of North Korea launching missiles at North America, because that’s not what its really about. The reality is that Star Wars Jr. is being set up to defend the US from China. Preparation is being made for when the economic battles and international competition for Imperialist Power end up not as a battle for consumers, but an actual war.

But wait the Republican Right Wing loves China; it’s the new capitalist marketplace. It seems that we all forget that during the Cold War there were 3 super powers. Three, trey, troy, three, and one of them was China. Still is, just quiet about it. She made her peace with Nixon, Nixon of all people. But that put the Republican Right between a rock and a hard place as allies of China against Russia.

The enemy of my enemy, very simple politics you Americans have. I blame it all on football; it’s where Americans get their Leaders and their Military strategy from. Which is why the U.S. supports Pakistan, Russia supported India, and China played them both off, still does, clever. And they still have Tibet. Tibet which was taken over by China the same time as Eastern Europe fell to Stalin. The Chinese play chess, so do the Russians, Americans just point their heads in one direction and charge.

Nope its good old competition in the market place, capitalism is war by other means. This may be a safer conflict for Canadians, then waiting for an American dud missile to drop on us. It’s a calculated risk, but Canadians are known as risk takers, especially if our neighbor is so dumb as to risk all our security with its warmongering and jingoism. Not much we can do about it, just politely smile nod our heads in that knowing way, and move to the other side of the room.

Recently China released an internal Chinese Military Assessment from its Chiefs of Staff written in 1999. The document was ‘leaked’ onto the Internet; nothing gets leaked from China unless the Party wants it leaked, as part of this new shadow war.

It’s about how to destabilize the USA. Not one word about tanks or missiles, it was about using the market to buy up shares, outstanding federal bills of credit, American dollars. Buyout American corporations, get more offshore work, and sell more goods to Wal-Mart. It was a plan to dominate the market. If the 20th Century was Americas, the 21st Century is China's.

China knows that you are a weak Empire, and as she purchases more market share here, it will not be for America's use but for her use. She is creating the Fordist manufacturing culture of prosperity that was once the domain of the USA, Europe, Japan and Korea. What kicked started these post war economies is kick starting China. If China once was a sleeping giant, she has woken up and is on her way to becoming the new capitalist behemoth.

Historically all trade and expansion of the last 500 years was westward, and once you get to the California Coast, it’s off we go westward to China to fulfill Columbus’s dream. So will America’s new cold war be with China? Your fetish for missile defense points in that direction.

Now that’s really DUMB.

Footnotes:

(1) It was a Republican President; Dwight D. Eisenhower who coined the term, Military Industrial Complex, fifty years ago when he warned they were dominating America’s economic, military, judicial and political elites. He was right America has a new ruling class.

NORTEL: Canada's Enron

Is there anyone working at Nortel anymore?

At one time Canadian Telecom giant Nortel had over 100,000 employees, by last year it had cut its workerforce again leaving the company with 30,000 workers. In a decade it has laid off over 70,000 workers. Its cuts to staff have affected its North American manufacturing and R&D operations, while leaving its offshore operations untouched.

It is Canada's version of Enron, it fired seven executives last year after the company faced criminal charges over allegations that they had been cooking the books about Nortels profitability. Nortel has refused to release its books to shareholders for the past three years in a massive cover up, as it's stock continues to crash and burn.

It has been laying off workers since 1995, as it got caught up in Schumpeters famous "Creative Destruction" cycle of; downsize in North America and expand to cheap labour markets like China.

And then thanks to the dot.com crash in 2001 it hit the Wall. Nortel fired one third of its workforce in 2001. It has changed its CEO and CFO who cooked its books to appear profitable in the marketplace. Ain't capitalism wonderful.

And now it is February 2005 and Nortel is again announcing yet another deadline, some time this April, to release its bookeeping and accounting information. Promises, promises, Nortel still has nothing to tell.

Nortel to release 2004 annual results by end of April
Last Updated Mon, 28 Feb 2005 18:41:13 EST
CBC News

BRAMPTON, ONTARIO - Nortel will release its delayed 2004 annual results by the end of April, the company said late Monday.

As part of its bi-weekly status update, Nortel also said it would file its unaudited third-quarter financial statements by the end of March.

Nortel also announced it ended 2004 with $3.7 billion US in cash.

The company is also planning to ask for court permission to push back its annual shareholders' meeting for both the 2003 and 2004 years by a month until June 30 at the latest.

The release of the company's results has been repeatedly delayed while it launched a major accounting review.

The accounting review led to the dismissal of several executives, including former chief executive Frank Dunn, who was replaced by current CEO Bill Owens.

On Jan. 11, Nortel released its delayed results for 2003, restating its profit to $434 million US from the initially-reported $732 million US. The company also restated results for 2002 and 2001.

In early February, it released results for the first two quarters of 2004, saying it made $75 million US in the first six months of the year.

Nortel shares closed Monday at a 52-week low of $3.26 on the TSX, down 21 cents.

The Fall of the Nortel House of Cards, 2004

Last year Nortel hosted a meeting for market analysists, and cheerfully predicted it was making a profit, despite evidence to the contrary. And it still had not called a sharholders meeting, or released any real bookkeeping or Accounting details. The CEO and CFO who called the conference were replaced by Nortel as word of its accounting scandal was made public.


Editorials
The new Nortel looks to a bright future
By John Dix
Network World, 02/23/04

Nortel hosted its annual analysts meeting last week in Boston to review what President and CEO Frank Dunn called tremendous 2003 results and to extol the company's position in its key markets.

While we weren't invited to the general morning session, we had the opportunity to meet with Dunn and many of his top lieutenants. To a person they were brimming with enthusiasm about future prospects.

All of which might seem strange given Nortel finished 2003 with sales of $9.8 billion, down 7% compared with 2002. But considering the recent past, that amounts to a great stabilization. Nortel sales crested in 2000 when the company topped the $30 billion mark, and then plummeted 37% in 2001 and another 40% in 2002. Seven percent is a relative dip.

Dunn says of last year the whole market was down and points to fourth-quarter sequential growth of 25% as a sign that Nortel is on the right track. "Business momentum is up," he says. "Progress is about all the things we've done. All the contracts we've signed. We're taking share. It will take time for our gains to be reflected in the numbers."

The company has been fundamentally overhauled. Two out of three employees are gone and Nortel is currently finalizing a contract that will result in it exiting the manufacturing business all together. In the new company, one out of every three employees is in research and development.

By August of last year, the sh** hit the fan and Nortel once again used its tried and true way of dealing with its fiscal crisis and criminal investigation, wait for it.....Lay offs.

"Nortel Networks Corp., the focus of criminal and regulatory accounting probes as it prepares to restate several years of financial results, issued a long statement Thursday in which it released results for the first half of the year; announced that it had cut 3,500 jobs, or 10 percent of its workforce; and reported new measures to enhance corporate governance and ethics.

The layoffs included the “termination for cause of seven finance executives.” according to the company announcement. " CFO Magazine, August 204
Nortel restructures, cuts 3,500 more employees
Has also fired seven more execs due to financial problems reported in March

By Robert Keenan, TechBuilder.org
Thu. Aug. 19, 2004

In an announcement Thursday (Aug. 19), the Ottawa-based company released new details into its restated first and second quarter earnings for 2004. It also announced plans to restructure into two operations and cut an additional 3,500 employees from its worldwide work force.

Nortel has retrenched on the financial front since announcing accounting irregularities in March. They led to the ouster of three executives, including the company's CEO and chief financial officer. Seven other executives have since been fired due to the financial problems reported in March, said William Owens, president and CEO of Nortel.

"We have terminated with cause seven business unit execs with financial responsibility," Owens said Thursday. "We will seek to reap the bonuses handed out to the 10 executives that were terminated," he added.

Earlier financial problems have also forced Nortel to restate its 2003 results and first and second quarter results for 2004. According to Owens, the company saw an approximately 50-percent reduction in 2003 net earnings. The company also reported unaudited revenue totals of $2.5 million for the first quarter of 2004 and $2.6 million for the second quarter of 2004. In both quarters, wireless network sales accounted for 51 percent of revenues
More layoffs are also expected. In today's announcement, Nortel said it would cut an additional 3,500 workers worldwide. Coupled with the 2,500 employees being shipped to Flextronics in an outsourcing deal announced in July, Nortel's total employee count will drop from 36,000 to 30,000 employees worldwide. In its heyday, Nortel had approximately 100,000 employees.

Owens said North America will be the hardest hit by the reductions, with few changes coming in markets like China, the rest of Asia and Latin America.
Nortel's layoffs could yield between $450 million and $500 million in spending reductions, thus allowing it to reduce its operational expenses to under 35 percent of its total by the end of 2005.

Nortel's latest financial results are based on unaudited figures and, according to the company, are subject to change. Nortel expects to complete its financial restatement process by the end of September.


Nortel's Annus Horribilus

Nortel's Crash and Burn Began in 2001 and it has been cooking the books ever since, and laying off workers, to make up for its shortfalls. But a revolving door of CEO's and CFO's was about to begin, with golden hankshakes for some and trinkle down economics of golden showers for the rest of the workers.

Nortel layoffs, losses have industry asking: What's next?
By Jim Duffy, Tim Greene and Phil Hochmuth
Network World, 10/08/01
MISSISSAUGA, ONTARIO - When Nortel is finished with its latest round of layoffs, divestitures, facility closings and management shakeups, the vendor will hardly resemble the company that it once was.
Nortel, which last week announced plans to fire up to 20,000 more people, shutter more "noncore" operations and replace its CEO with its CFO, is streamlining its business again after warning of another multibillion-dollar quarterly loss. It will now focus on three areas - long-haul optical, metropolitan and wireless networks - instead of the five it targeted just three months ago. Two IP-related areas having been dropped from the ranks.

The Globe and Mail reported at the time:

"With 10,000 layoffs announced for the global work force of Brampton, Ont.-based Nortel Networks Corp., there is plenty of talent on the loose.

With competitors closing in, recruitment specialists following the Nortel situation say the company's major challenge is to retain the top-level employees it wants to keep. Mr. Moore says he will not raid -- he is looking for free agents. Others will not be as gentlemanly.

Alan Kearns co-founder of TalentLab.com, a high-tech search firm based in Kanata, Ont., says fallout from the layoffs -- especially Nortel's falling stock price -- could have serious implications for the key employees it needs to hold.

"There are a number of people with stock options that were worth a whole lot of money six months ago and now they are not," Mr. Kearns says. "They are asking 'Why should I stay here? My golden handcuffs are no longer.'

"So far, Nortel has not come up with a good response."

In a speech to the Canadian Club in Toronto Monday, Nortel chief executive officer John Roth made little reference to the impact of Nortel's "work force correction" on employees, except to note that his company wanted to avoid the exodus of key talent suffered by rival Lucent Technologies Inc.

An aggressive recruiter in boom times, Nortel has long prided itself on being an "employer of choice," providing healthy pay, flex time and top-of-the-line perks. The company is tight-lipped about its severance packages and is equally reluctant to discuss how it will retain, and selectively hire, the employees it still needs to be a world-leading company."

As CAW Economist Jim Stafford wrote:

New Economy, Same Old Pink Slips
When the going gets tough, the bosses look after themselves

Now it is announced that Nortel Networks is laying off 30,000 workers, one-third of its workforce. These displaced computer nerds and internet wizards are learning a hard lesson. They may work in the new economy, but their lay-off notices come in the same colour: pink.

Apparently it doesn't matter how smart you are, or how up-to-date your "human capital." Whether you work in the new economy or the old economy, you stand a good chance of being shown the exit when your employer's bottom line starts to bleed. What new skills will the career counselors suggest for the laid-off Nortel workers? I thought they had the new skills.

To be sure, there are some important differences between the layoffs at Nortel and those at General Motors. The Nortel workers got canned a lot quicker. And since most were not union members, their severance packages were a lot stingier. So much being ahead of the knowledge curve.

But for the most part, the Nortel layoffs reinforce my long-standing suspicion that the "new economy" looks a lot like the "old economy."

For example, both old-economy and new-economy firms can lose incredible amounts of money. Nortel is warning of an incredible $19.2 billion (U.S.) loss for its second quarter. That's one of the worst quarterly losses in corporate history (world corporate history, not Canadian corporate history). Coincidentally, only General Motors ever lost more in a single three-month period, with its $21 billion (U.S.) write-down in the first quarter of 1992.

Meanwhile, Nortel employees--like the GM workers before them--are finding out that when the going gets tough, the bosses look after themselves. Nortel CEO John Roth topped last week's Report on Business survey of Canadian executive compensation, taking home a cool $71 million in 2000. His company, meanwhile, placed dead last in RoB's list of the most profitable Canadian companies, posting a $3 billion loss. (That's a lot of red ink, but it's small change compared to the gargantuan loss Nortel will book this year.)

To be sure, much of Roth's compensation last year consisted of stock option gains, and any Nortel shares that Roth subsequently kept are now worth a fraction of their former value. Nevertheless, even as Nortel crashed and burned, Roth took home enough old-fashioned money--the kind printed by the Mint, not by Nortel's treasury--to keep him in good plonck for his golden years. Roth made $20 million in cash salary and bonuses over the past 3 years. Unlike his 30,000 laid-off workers, he's not losing sleep over how to pay the mortgage.

In their commitment to looking after their own, Nortel's executives are carrying on a long and honourable tradition pioneered years ago by old-economy companies. Indeed, perhaps the biggest difference is merely the extravagance with which new-economy executives are rewarded, even as workers lose their jobs and shareholders lose hundreds of billions of dollars. For instance, former GM CEO Robert Stempel took home a mere $3 million (U.S.) in cash salary and bonuses in the 3 years prior to his forced 1992 retirement. So despite the dot-com meltdown, perhaps microchips are still better than cars--for senior executives, anyway.

Meanwhile, compared to the bleak 1990s, GM now looks like a veritable hot prospect. Its shares are up 20 percent so far this year, a breath of old-economy fresh air for stock markets staggered by the high-tech meltdown. It was if once the company hit bottom in 1992, it had nowhere to go but up.

Perhaps this same principle can give hope to Nortel's beleaguered shareholders. The worst is surely behind them. And think of what could happen on the way back up. Indeed, a newly-discovered mathematical theorem--we might call it "Roth's Law"--proves that reported percentage changes look bigger when something is growing, than when it is shrinking. Nortel shares have lost 90 percent of their value, falling from $125 to $13. Suppose they now bounce back to $26. (Some might call this the "dead cat" bounce.) That's a 100 percent gain. Sure, you're still out by almost $100 a share. But a gain of 100 percent, after a loss of only 90 percent, might make you feel better.

And if you believe that, I've got some shares in an Indonesian gold mine that might interest you.

Facts from the Fringe #39
by Jim Stanford
July 2, 2001

Past editions of Facts from the Fringe.
If you would like to subscribe to the e-mail distribution list,
just write back to stanford@caw.ca.

Government Denies Alberta Families Public Day Care

On the heels of the Federal Government announcement in it's Budget 2005 that Alberta was entitled to $70 million dollars for public day care this year, for a total of $500 million dollars over the next five years which would include expanding spaces and possible wage increases to underpaid staff, all money from one source us, Alberta taxpayers.

Alberta Government Children's Services Minister Heather Forsyth still refuses to accept the money if it doesn't go to for profit day cares. Once again this government is cutting its nose to spite it's face.

As of today it has been reported in the news that a private day care operator left another of the children in their care to wander off unsupervised. In Montreal a private day care operator was charged with abusing two children in her care.

So despite the evidence that for profit day care is about business not child care or child development, Alberta being the bastion of Republican ideology in Canada, continues to insist that funds go to these profiteers.

"The program should offer parents choice and flexibility, whether it's not-for-profit or for-profit, whether they choose to a day care or day home," said Forsyth.

The Alberta government insists on short changing Alberta families as I point out in the the IWW Family Day Press Release, Alberta Families say: Show Us the Money, Ralph

"Alberta Families deserve their share of the Federal Day Care fund, they paid for it they want it and need it. The Klein government’s insistence on using taxpayer money to benefit private for profit day cares denies Alberta families access to affordable public day care. It also denies day care workers a Living Wage. Currently many child care workers in Alberta make barely above the minimum wage of $5.90 an hour. Parents are forced to work shift work in order to take care of their children at home, due to the lack of public day care spaces. Parents working two jobs each, just to make ends meet are being left out of the “Alberta Advantage”.

Alberta has the lowest use of public day care in Canada, because the Alberta Government has allowed private for profit day care centres and baby sitting services to access funds earmarked for public day care. Alberta families are paying for someone to profit off their plight and without access to Federal funds, they will be paying twice for the privilege of having no access to public day care.

Alberta Families deserve their share of the Federal Day Care fund, they paid for it they want it and need it. The Klein government’s insistence on using taxpayer money to benefit private for profit day cares denies Alberta families access to affordable public day care. It also denies day care workers a Living Wage. Currently many child care workers in Alberta make barely above the minimum wage of $5.90 an hour. Parents are forced to work shift work in order to take care of their children at home, due to the lack of public day care spaces. Parents working two jobs each, just to make ends meet are being left out of the “Alberta Advantage”.

Alberta has the lowest use of public day care in Canada, because the Alberta Government has allowed private for profit day care centres and baby sitting services to access funds earmarked for public day care. Alberta families are paying for someone to profit off their plight and without access to Federal funds, they will be paying twice for the privilege of having no access to public day care."

Forsyth and the Government continue to push their privatization ideology despite facts to the contrary. The fact is that all of the incidence of child abuse in day cares in the province have occured in for profit day cares. And still she insists on funding them at the expense of a good public day care system.

Private for profit day care is not about child development it's about profit. The Alberta government loves to spend public money on caring for millionares rather than public day care.

"Reporter Laurie Monsebraaten profiled one of Australia's richest men in the Toronto Star this week. What's the secret to Canadian-born Eddy Groves' success? Child care. Or more accurately, a government that invested heavily in child care and allowed commercial operators access to public cash. "
Big box child care: how to become a millionaire


DAY CARE SHUT DOWN AFTER 2ND BABY LEFT ALONE
Last Updated Thu, 24 Feb 2005 23:26:44 EST
CBC News

EDMONTON - An Edmonton day care that left an infant locked inside alone in the dark has been ordered shut down after another toddler was found unwatched in a playground.

The Alberta Ministry of Children's Services took the rare step of immediately removing the licence for the Bearspaw Day Care Centre, said Ron Bos, a spokesman for Edmonton Child and Family Services.

A 20-month-old child was left alone in an outdoor playground on Wednesday, Bos told the Canadian Press.

"It was a second incident regarding a lack of supervision and putting a child at imminent risk in the past month, so we felt we had no choice but to issue a stop order and immediately close the day-care centre."

The centre came under public scrutiny on Jan. 27, when a six-month-old boy was locked up alone for about three hours after staff went home for the night.

A provincial probe found the day care didn't have parents sign their children in and out as required under government regulations. It banned the centre from caring for children under 19 months of age.

The second incident surfaced after a man heard the child crying in the yard and took him into the day care, then called child services, who investigated.

The owner of the day care, Bonita Berezanski, declined comment Thursday.

However, a parent who has been leaving her 18-month-old child at the day care for six months was disappointed by the news.

"It was about three to five minutes before they realized the little guy wasn't there," Amanda Hall, who was there when the latest incident occurred, told the Canadian Press.

"This centre is great. –It's sad that we have to say goodbye to the people who love our children." The province has issued stop orders to only two other licensed day cares in the province.

The centre has 14 days to appeal the decision.

In the meantime, Bos said the 36 families who had children in the day care were contacted and given a letter explaining the reasons for the closure.




STRIKE 2: DAY CARE'S OUT
CHILD AND FAMILY SERVICES CLOSES CENTRE AFTER 20-MONTH-OLD LEFT OUT IN COLD

Mike Sadava
The Edmonton Journal

February 25, 2005

EDMONTON - An Edmonton day-care centre that locked a baby inside after hours last month and left a toddler outside on Wednesday has been closed by the province.

The Bear's Paw Day Care Centre was permanently shut down Thursday by Child and Family Services after a 20-month-old toddler was left unsupervised in an outdoor play area Wednesday morning.

A worker in an apartment building overlooking the play area apparently heard the toddler crying and eventually took the child inside the centre.

It was a sunny, spring-like day, and the child was unharmed.

A month ago, the same day care, located in a strip mall near 105th Street and 19th Avenue, had its baby room shut down by Child and Family Services after staff locked up for the night, leaving an infant in a crib for three hours.

On Wednesday, six children aged 20 months to three years were playing in the fenced outdoor area that includes several slides and small play houses.

The children were supervised by three staff members, said Ron Bos, Edmonton spokesman for Child and Family Services. When it came time to take the children back inside, the 20-month-old was somehow left behind, he said.

Paul Kovacs, the worker in the next-door apartment building, heard crying. He initially thought it was coming from one of the suites and went back to work, but still heard the crying and discovered it was coming from the day care's play area. He went down to investigate.

"He had no gloves, one boot was already off. If I hadn't come out here, who knows how long it would've been until they came out here and found the kid."

Kovacs estimated he heard the crying for about 30 minutes.

Bos said the "stop order" means the day care is shut down permanently. The fact that this is the second incident had a major impact on the decision, he said.

"To us, they're one and the same, leaving a child unattended and at imminent risk," Bos said. "Considering that, relatively speaking, they happened back to back plays a huge part in it, because we did put measures in place and ordered the day care to follow those measures.

"It doesn't stop them from applying for another licence somewhere down the road, but their track record would come into play."

Only two other stop orders have been issued in the Edmonton region over the past 20 years, Bos said.

The owner of the Bear's Paw centre, Bonita Berezanski, has a separate licence to run an out-of-school care program for school-aged children in the same building. That operation is not affected by the stop order and can remain open, he said.

The 36 families affected by the closure were contacted by Children's Services on Thursday.

Most parents interviewed after picking up their youngsters from the centre were sympathetic to the owners.

"The staff have been kind to these children, and we're all guilty of making mistakes," said Amanda Hall, who had a two-year-old at the centre.

She was dropping her child off and signing some papers around the time the toddler was found. She estimated the child was alone for three to five minutes.

"It's sad that we're losing the people who love our kids," said Hall, who had already found a space for her two-year-old in another day-care centre.

Fannie Very, whose twin three-year-old girls had been going to Bear's Paw for two months, said she didn't think the centre should be closed down.

"I have no child care as of now," said Very, who works at a call centre. "I have a full-time job I've been struggling to keep because of child-care issues."

She acknowledged that she would be angry if her child was left outside.

Bos said parents picking up children Thursday were given a list of day cares and a letter explaining that Bear's Paw was closed. "We know there are 36 families under stress, but given the circumstances, we felt we didn't have a choice."

Berezanski and staff at the centre declined to be interviewed.

© The Edmonton Journal 2005

PRIVATE DAY CARE OPERATOR GUILTY OF ABUSING TWO BABIES

Canadian Press

Wednesday, February 23, 2005

MONTREAL (CP) -- A day-care operator was found guilty Wednesday of two counts of aggravated assault after two babies in her care suffered skull fractures.

Cathy Matteau, 23, has yet to be sentenced.

The babies suffered their injuries within a week of each other and only days after starting at Matteau's at-home day care in early March 2003.

The six-month-old infant ended up with a skull fracture. The 11-month-old had a similar fracture, along with six smashed vertebrae, and showed signs of shaken-baby syndrome.

In a videotaped statement Matteau gave to police after her arrest in 2003, Matteau suggested the babies might have been "pitched against a wall.''

Dr. Dominique Marton, a child abuse expert, testified last week the babies probably had their heads banged against a hard, flat surface, like a wall, floor or ceiling.
© Canadian Press 2005

ALBERTA MAY REJECT FEDERAL DAY-CARE FUNDS
$5 BILLION PLEDGED, BUT PROVINCE WANTS PARENTS TO HAVE CHOICES

James Baxter

The Edmonton Journal; with files from CanWest News Service, and The Canadian Press.

February 24, 2005

EDMONTON - The Martin government pledged $5 billion over five years for a national child- care program Wednesday, but Alberta is prepared to forgo its share if it comes with too many strings attached.

Children's Services Minister Heather Forsyth said there was little new in the budget to help end the federal-provincial standoff over Social Services Minister Ken Dryden's push to create a national child-care program.

She said the provinces were expecting the budget would offer a blueprint for the next round of negotiations, but their concerns went largely unaddressed.

Instead, Finance Minister Ralph Goodale announced that an initial payment of $700 million will be paid into a third-party trust from which provinces and territories can draw on a per-capita basis in the coming two years as provinces develop their respective child-care systems.

"I think it's good that we're getting some clarity on the federal government's funding commitment," said Forsyth, who was reached at a conference in Victoria.

"However, we still believe we have a long way to go. We're not sure that the money is coming to Alberta."

Forsyth did not rule out that Alberta could walk away from its share of the funding, an estimated $70 million this year and $500 million over the next five years, if it comes with onerous restrictions.

At the top of Forsyth's concerns is any system that requires funds be spent on accredited day-care programs, rather than giving individual parents the choice to use the money to raise their children however they see fit.

"There's never that kind of agreement, where we're talking that kind of money, that there's no strings attached. Never. Trust me," she said. "I think those are some of the things that we have to hammer out."

Forsyth said she is disappointed that the federal government refuses to look at other measures to ease the burden on stay-at-home parents. She said what she hears most is a request for tax relief for parents who choose to raise their own children.

"That was never discussed at the (Vancouver) meeting," she said. "It wasn't even considered or talked about at the table and Minister Dryden made that very, very clear. We're talking about a national day care (program) in this particular funding model."

Child-care advocates cheered the budget announcement and said Forsyth should use the funds to bolster child care centres.

"I am pretty confident that the (Alberta) government has a strong idea of what is needed here to develop quality child care and will look at it carefully and consider the issues," said Sherrill Brown, who chairs the Alberta Child Care Network Association.

"I know (we) believe that it is child care's turn and that we need to be putting that money into child-care programs in order to support them so that we can support families."

"I would hope Alberta would use the funding for licensed child-care programs," said Tanya Szarko, spokeswoman for the Day Care Society of Alberta, adding that the federal government should require commitments from the provinces to invest in child care. "There needs to be a clear standard on where funds are going."

Barbara Coyle, executive director of the Canadian Child Care Federation, voiced concern that the first $700 million appears to have been doled out without sufficient conditions.

"One concern we have is that the first $700 million is flowing without strings attached, which is going to mean that we're going to have to work even more closely and vigilantly with the provinces and territories to ensure that the money is tied to (the proposed child-care program's) principles," she said.

Dryden and the ministers will meet again in the next few weeks.

© The Edmonton Journal 2005

$5 BILLION PUT INTO DAY CARE DESPITE LACK OF SPENDING PLAN
ALBERTA UNSURE WHAT TO DO WITH CASH

Michelle Lang
Calgary Herald; with files from CanWest News Service

Thursday, February 24, 2005


Calgary day cares aren't banking on their share of a $700-million cheque for national child care in the federal budget, saying they need details on the proposed program and how funds will be spent.

Wednesday's budget allocated cash for a much-anticipated Canada-wide child care program -- $5 billion over five years, including $700 million for the provinces to spend in 2005.

Yet, without an agreement on the national child care initiative, which Ottawa unsuccessfully tried to broker with provinces earlier this month, the budget was short on details about the proposed program.

Local day cares -- and even Alberta politicians -- were left with unanswered questions about how the budgeted cash will be spent.

"I'm very excited about idea of the national program," said Tanya Szarko, spokeswoman for the Day Care Society of Alberta.

"But there needs to be a clear standard on where funds are going.

I wouldn't want to see funds allocated to unlicensed programs."

Despite some criticism, child care advocates also praised federal Finance Minister Ralph Goodale's budget for following through on Ottawa's pledge to allocate $5 billion in funds for the proposed program over five years.

In 2005, while federal-provincial negotiations on the program continue, $700 million will be available to the provinces on a per-capita basis "as they require." The money will be paid into a third-party trust.

It isn't clear how Alberta will spend its share of the cash. Alberta Children's Services Minister Heather Forsyth said she needs clarification from federal Social Development Minister Ken Dryden about how the $700 million can be spent.

"We need to understand how they see the money flowing," she said.

Earlier this month, Forsyth refused to sign on to Dryden's national childcare proposal during federal-provincial talks in Vancouver, saying the initiative should be more flexible in allowing parents to choose the type of day care they prefer. Forsyth also wanted guarantees Ottawa will fund the national program after its five-year commitment.

On Wednesday, she said her position hadn't changed.

"The program should offer parents choice and flexibility, whether it's not-for-profit or for-profit, whether they choose to a day care or day home," said Forsyth.

Some in Calgary's day care community agreed the cash should simply be handed over to lower- and middle-income families to subsidize child care costs at licensed facilities.

Georgina Leimert of Mount Royal Day Care suggested some funds might also go to upgrading day cares and paying for more staff training.

Leimert said it shouldn't pay for parents to stay at home and take care of their children themselves.

"I'm wondering where is this money supposed to go," she said. "The government hasn't said."

The $5-billion child-care investment also includes $100 million to develop early childhood programs on First Nations reserves. Moreover, government proposed $120 million over five years to improve an existing on-reserve special education program for First Nations children.

While child-care initiatives made headlines in Wednesday's budget, the spotlight was off of health care.

The budget did, however, outline the payment plan for the $41-billion health-care accord Ottawa and the provinces reached last fall.

Federal cash transfers will rise from $16.3 billion this year to $19.6 billion next year, Goodale said.

After that, transfers will escalate by six per cent annually until they reach $30.5 billion in 2013-14.

© The Calgary Herald 2005

February 24, 2005
FORSYTH LETTING PARENTS DOWN - CUPE

TURNING AWAY DAYCARE FUNDS ‘A CRIME’ AGAINST WORKING PARENTS

CALGARY - Turning away from $500 million in daycare funding for Alberta would leave Alberta parents in a lurch. That was the opinion of D'Arcy Lanovaz, Alberta President of the Canadian Union of Public Employees (CUPE).

Lanovaz was responding to media reports that Children's Services Minister Heather Forsyth might turn down federal day care funds if the money has to go to accredited day care centres. Alberta's share of the funding would be approximately $500 million over five years.

"What the minister is saying is that unless the government does what she wants, Alberta parents get left out in the cold," said Lanovaz. "Turning your back on that kind of support doesn't make sense - it's a crime against working parents."

"The provincial government likes to talk about 'choice' for parents, but what kind of choice do parents have when the government turns its back on funding for more and better daycare spaces," said Lanovaz. "All Forsyth is doing is taking choices away."

Lanovaz said that the federal government promised a national childcare program, and that CUPE supports a system geared towards non-profit care.

"Study after study, including a recent study by the University of Toronto, shows that non-profit day care centres provide the highest quality care on almost any factor you measure," said Lanovaz.

"Why is the provincial government against quality child care?"

-30-