The Paradox Of Minimum Wage In Contemporary Society

By André Faust (11/11/2018)

In our system of economics, the minimum wage is functional in controlling for inflation and for that reason, the minimum wage will always create a class working poor and create a loss of buying power in the higher wage earners.

What happens when the minimum is raised inflation goes up? As inflation goes up the bank of Canada increases the lending rate to control the rate of inflation. The consequence is that all the industries in the system raise their prices to offset the increase of wages and interest rates.

In essence, what we have is an endless loop which each time it cycles there is a loss of buying power.

How much one makes really isn’t a good measure of prosperity. A better measure is the buying power of wages earned. As buying power diminishes workers have to work more hours to pay for goods and services.

There was a time that a worker working for the minimum wage of 75 cents or less per hour had greater power buying power than today’s worker, who in New Brunswick makes 11.25 per hour. The loss of buying power effects every wage earner, the 20.00$ per hour wage earner wage doesn’t increase yet everything else increases so his/her wages gets closer to the minimum rate.

The result of the loss of buying power is that the supply and demand are also affected. Wage earners are buying less so the demand drops, and with a drop in demand, supply decreases as well. When supply decreases the frequency of layoff also increases resulting in less money to spend. This process will continue until the entire system fails.

Our economics is a system consisting of nodes, and whatever happens in one node affects all the other nodes of the system. An example nodes are the banking institution, industry, the wage earners, investors, the stock markets, human displacement technology and so on.

Our present system of economics is not sustainable and as a result, it will eventually collapse. To avoid the eventual collapse, we have to have the social and political will to change the system. In other words, we need to have the sociological imagination to resolve the wage issue as it relates to the consumer price index. The likelihood of such a change ever happening is possible, but highly improbable. The most likely reason why changes are highly unlikely is that they are too many stakeholders working for their own interest.

In summary, not including the price of fuel minimum wage contributes to inflation and a loss of buying power for the higher wage earners. While there are other factors which contribute to rising inflation such as willfully creating a shortage to boost prices the increase in the cost of production precipitated by increased wages is the dominant factor for the increase in inflation. Our system of economics is made of nodes, and each node can affect the whole system because whatever happens in one node cascades throughout the entire system. Lastly, each business is self-centered it only looks after its own interest and doesn’t acknowledge that it is part of a system.

The cycle of inflation is always greater than the cycle of deflation and if this process is allowed to continue the likelihood of catastrophic economic failure is possible.


 

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Do voters really know the philosophy of the party they vote for?

By André Faust (Oct 21,  2018)

An election has come and gone here in New Brunswick, but we could go into an early election if the kids cannot get their shit together.

When it comes to voting do people know or understand the philosophy of the party they are voting for? Do people just vote on the campaign marketing plan or do they really know what their chosen party stands for?

I would argue that most people don’t know what their party stands for, except for the Greens from the discussion, verbal, in the media and online it does appear that green supporters understand what green stands for.

For the two old-school parties the Liberal and Conservatives voters do not know the political differences between the two. During the last election, the common phrase was Liberals and Conservatives are one of the same. If one knew and understood the philosophy of each they would realize that there is a fundamental philosophical difference between the two.

According to (Jana, Keith, and Goldman) there are some fundamental differences between the two and in both camps there exist small l and large L for the liberal camp and for the conservatives you have small c and large C.

What Jana, Keith, and Goldman describe is more the difference between center-left liberals and center-right conservatives which pretty well describes our provincial conservative and liberals.

So what does it mean to be Liberal or conservative? Remember this is just a general description of the ideologies between the two in the province of New Brunswick. Harper’s conservative border lines extremisms.

To be a liberal is to have a core value system that believes in freedom of thought, and speech placing limitations on government, tolerance, our charter of rights and freedom is built on liberal ideologies. Liberal ideology a mixed economy between state own and private enterprises. When it comes to social order Liberals try to find that balance between individual freedoms and social order. Which when you look at the constitution and the Charter of rights is based on these fundamental values and ideology.

Conservatives, on the other hand, tend to focus on personal wealth and private ownership of business enterprises which foster self-reliance and individualism. When it comes to crime and punishment, conservatives tend to be more punitive towards offenders, rather than focusing on rehabilitation of the offender. Tolerance conservative is less tolerant and is more ethnocentric and more than often be hostile toward minority groups such as newcomers coming in either in the province or in the country.

Extreme liberalism and Conservatism are really in their own categories, while they do have the fundamental ideologies they also push the envelope at both ends.

Related to Liberal ideology or philosophy is the Green Party. The green party has a lot more in common with liberal philosophy than conservative philosophy yet they have their own philosophy.
The Greens political philosophy aka ecopolitcs core ideology encapsulates creating an ecologically sustainable society which is rooted in environmentalism, nonviolence, and social justice than the liberals, but still within the parameters of center-left. The NDP also shares Liberal ideology/philosophy or inverse can be said Liberals share NDP ideologies. While the NDP are not radical left out of the five parties they are left because the NDP has adopted socialist philosophy as their core values, for example, social democracy and democratic socialism.

The People’s Alliance of New Brunswick while different than the Progressive conservative share some of the same philosophy, but the Peoples Alliance also share Liberal values as well in terms of transparency. Both the Conservatives and the Peoples Alliance of New Brunswick financial philosophy tend to follow Hayekian economics which says that it is business that should inject money into the economy to stimulate growth, and both PC and PANB seem to favor austerity to balance the books. The Liberals and Greens, on the other hand, tend to be more Keynesian in the sense that if you want the economy to grow the states has to put money into peoples pockets.

I have just skimmed the surface of political ideologies and philosophies, that has been countless books that have been written about political philosophies.


 

Barker’s Point the environmental disaster which has been forgotten about

by André Faust (12/09/1918)

Barkers Point a quaint little bedroom community located on the North-Eastern side of the Saint John River. Employment was readily available in Barkers Point’s golden days. During the sixties and beyond, Barker’s Point was the home for several major employers. To mention a few, Bonar’s bag factory, Abe Levine and Sons were a few that contributed to the economy of Barkers Point.

All most everyone in Barkers Point worked the dreaded Levine’s battery shed. It was almost a write of passage.

The problem that existed for this employer was the amount of contamination that entered the soil and water column. At that time the environmental impact was never understood.

Since then, then the junkyard has changed hands several times. However, it appears that non of the new owners have taken the initiative to clean up the environmental damage that has both alter the natural environment and changed the ecosystem.

One possible reason that the residents of Barker’s point don’t demand environmental Canada to enforce its policies may be because the residents have become desensitized.

Walking around the scrap yard is like going through an unmaintained landfill site. What you see is garbage, old tires, oil saturated ground, and water.

Someone has to take responsibility for the cleanup, and Environment Canada should be made aware of the problem. If Environment Canad is aware then why has there been no action taken?

Green Party diminishes their credibility the very thing they wanted to avoid by banning Chris Smissaert as Candidate for Fredericton North

Chris Smissaert
Chris Smissaert former candidate Green Party Fredericton North – Photo Charles Leblanc

Chris Smissaert was banned to run as a Green Party Candidate even though he won his nomination with a wide margin. He won his candidacy by a democratic process. Removing him as a candidate undermines the democracy that we as Canadians so cherish.

It appears that Political correctness was the justification for his removal. Anecdotally speaking the word is that he was removed because he wasn’t the favored Candidate among some of the members of the Fredericton North Green Party Riding. The Green Party executive claimed that one of the reasons for banning Smissaert was because of his bullying tactics. What constitutes bullying, the concept has been watered down so much that simply raising one’s voice or if one is assertive can be construed as bullying. Concepts such as bullying, character unbecoming, and public safety are contextual terms and there meaning is dependent on the spin that is given to them.

The other reason that has been officially stated as a reason for his removal was that Mr. Smissaert introduced himself as a Green Party Candidate at a non-political function. Just stating that he is a Candidate is not a political comment but a fact. Had Chris expanded suggesting that the green party is the party of choice then it would have been a political comment. That was not the case.

Politically removing Chris Smissaert as a candidate for Fredericton North and parachuting Tamara white as an alternative candidate has damaged the party’s credibility.

Whether a party wins or not, the number of votes that a party receives represents x number of dollars that the party will receive. Unfortunately for the Green Parties decision of terminating Smissaert the party will not maximize the potential votes they would have received had they not banned Smissaert as a bonafide candidate for Fredericton North.


 

Bank of Canada increases interest rates to make the rich even richer

By André Faust (July 12, 2018)

Today in a press release the Bank of Canada has announced that it Is increasing lending rates to 1.5% to the retail banks. (“Bank of Canada raises overnight rate target to 1 ½ percent”, 2018). So what does that mean for the average Joe/Jane on the streets, well it means that if you are taking out a loan or credit today your interest payment will increase by 1.5 % and if you add it to compound interest then that number becomes significant.

Before going on, let’s turn the pages back and look at the role of the Bank of Canada before I get into today’s announcement.

Let’s go back to 1938 to the year 1974, Canada was borrowing from itself at interest-free loans, which allowed Canada to be very prosperous. So as a result of these loans Canada developed quite substantially, with the money created being used to build highways such as the McDonald-Cartier freeway, public transportation systems, subway lines, airports, the St. Lawrence Seaway, funding the universal healthcare system, and the Canadian Pension Plan and so on.

In 1973 Trudeau’s government decided to stop borrowing from the Bank of Canada at interest-free to the retail commercial banks who charge interests. Here is where it gets crazy because of it the Bank of Canada who sets the interest rates. How rational is that?

After Canada started to borrow from the commercial banks is when we see Canada’s debt load increase to where it is at today.
Obviously, Trudeau did not follow the wisdom of Mackenzie King himself who had once said,
“ Once a nation parts with the control of its currency and credit, it matters not who makes the nation’s laws. Usury, once in control, will wreck any nation. Until the control of the issue of currency and credit is restored to government and recognized as its most sacred responsibility, all talk of sovereignty of parliament and of democracy is idle and futile.

So here we are at today’s announcement, basically, the Bank of Canada said it would increase the interest by 1.5 % which means that the Federal, Provincial and municipal government will now even pay more interest on interest. For Canadians especially those seniors on Fixed income and if their mortgage is up for renewal there is a likely hood that they will not be able to pay the new rates, and lose their home to the banks.

Both Trudeau and Gallant inject a considerable amount of money into the economy which did stimulate economic growth people had more money so they were spending more.

This interests increase is going to remove money and buying power from the people which we should see all of the efforts to strengthen our economy go down the toilet bowl. It is expecting that the bank of Canada will have another rate increase in September.

The only winners in this are the banks. Let follow Mackenzie king approaches to economics where the country, the provinces and the manipulates don’t pay interests on interest but pay the Bank of Canada like the old day’s interest-free.



References

Bank of Canada raises overnight rate target to 1 ½ per cent. (2018). Retrieved from https://www.bankofcanada.ca/2018/07/fad-press-release-2018-07-11/

Household debt-to-income ratio edges lower: Canadians now owe $1.70 for every $1 earned. (2018). Retrieved from https://business.financialpost.com/news/economy/statistics-canada-reports-household-debt-to-income-ratio-edges-lower

Prudent Press | The History of the Bank of Canada. (2018). Retrieved from http://prudentpress.com/finance/history-bank-of-canada/

Remember when: What have we learned from the 1980s and that 21% interest rate?. (2018). Retrieved from https://www.theglobeandmail.com/real-estate/the-market/remember-when-what-have-we-learned-from-80s-interest-rates/article24398735/

Trade tensions the ‘biggest issue’ on the horizon as Bank of Canada hikes interest rate | CBC News. (2018). Retrieved from https://www.cbc.ca/news/business/bank-of-canada-rate-decision-1.4742063