Running out of economic options

Columnist/economist David Crane is remarkably honest in his assessment of the Canadian economy (Red Deer Advocate, April 2). He identifies the problems, backing them up with facts and figures. But there is no real explanation as to the cause of the current crises or indeed a workable remedy.

Columnist/economist David Crane is remarkably honest in his assessment of the Canadian economy (Red Deer Advocate, April 2). He identifies the problems, backing them up with facts and figures.

But there is no real explanation as to the cause of the current crises or indeed a workable remedy.

If we accept his premise that we need to buy less and sell more, we must ask ourselves how this will be achieved in a competitive economic system?

Competition exists not only between companies but also between nations that are all in the same situation, trying to export more and import less.

Achieving an advantage depends on having more industrial investment than your competitor, be it a company or a nation, but as Crane points out, industrial investment is falling.

The basic problem is one of overproduction or overcapacity, which means the same thing. We can produce an endless amount but companies refrain from doing so because more things are being produced than can be sold at a profit.

Why invest in more productive capacity when you are unable to sell at profit what you already produce?

As Crane points out, Canada is becoming less competitive, accumulating a $275.5-billion current account deficit that is financed by borrowing.

In order to overcome the limits of the world market, where working people cannot afford to buy back the things they produce, credit was expanded to unheard of levels from the 1980s until the financial crash of 2007-8. This is what financed the last world economic upturn and it has now gone into reverse, as the debts from the bailout of the banks have to be repaid.

In an effort to repay these massive state debts, accrued from the collapse of the banking system worldwide, countries are implementing a policy of austerity that is only adding to the problem.

Every cut in welfare, every pay cut, every privatization and closure that cuts out well-paid jobs reduces spending power, exacerbating the lack of markets and adding a further disincentive for productive investment.

There is no easy way out on the basis of the present economic system.

Those at the top want the ordinary working people to pay for the crises but why should they pay when the crises is not of their making? Workers will be unable to bear the massive cuts to their living standards that are planned and without doubt there will be repercussions.

Political parties will be tested during the coming stormy and eventful period. Eventually, just one particular political party will offer the alternative of a democratic, socialist, planned economy. This will be a precursor for fraternal, co-operative, international trade that will benefit all nations.

Keith Norman Wyatt

Innisfail NDP

(personal capacity)

Just Posted

Updated: SUV smashes through fences and deck in Anders

Driver taken to hospital after SUV veered off 30th Avenue into Anders

Red Deer’s new ‘equity co-ordinator’ will promote tolerance

Andrea Lacoursiere was hired by city with Alberta Human Rights funding

More bridge work this summer in Red Deer’s Coronation Park

The park’s north bridge is being rebuilt to ensure safety

Man badly injured in off-road vehicle collision on Saturday

Incident happened in Mountain View County about 10:50 p.m.

Heat warning in effect for Central Alberta

Environment Canada has issued a heat warning for Central Alberta. Residents in… Continue reading

CFIA inspects after video shows pigs crammed into B.C. transport truck

The video shows pigs piled on top of one another in a transport truck on a “sweltering” hot day last week

Lava crashes through roof of Hawaii tour boat, injuring 23

HONOLULU — An explosion caused by lava oozing into the ocean sent… Continue reading

Banff holds blessing ceremony with Indigenous elders before letting bison roam

BANFF, Alta. — Several Indigenous elders were flown by helicopter into the… Continue reading

Research expedition looks at unseen depths of Labrador Sea ecosystem

ST. JOHN’S, N.L. — Last summer, a team of scientists returned from… Continue reading

Protesters camped outside Saskatchewan legislature taking province to court

REGINA — Protesters camped outside the Saskatchewan legislature say they are taking… Continue reading

British PM accepts key amendments from hardline Brexiteers

LONDON — British Prime Minister Theresa May on Monday accepted amendments to… Continue reading

‘City of icebergs:’ Study says 100s of Arctic glaciers shrinking, disappearing

The statistics in her recently published paper say it all: hundreds of… Continue reading

U.S. hits back with WTO challenge against Canada’s retaliatory tariffs

OTTAWA — The United States fired back Monday at the Canadian government’s… Continue reading

Croatia gears up to give heroes’ welcome to World Cup team

ZAGREB, Croatia — Fans are pouring in from throughout the country as… Continue reading

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month