Has anyone ever considered what's going to happen when all the construction for the Olympics comes to an end? Will Vancouver's economy be "booming" then?

What about in the oil-patch of Alberta? A resource driven "boom" in construction with seemingly no end in sight. Much more genuine than the "make-work" project hosting the Olympics was the excuse for.

But it too, will one day end. As all previous "booms" have also ended. We need only look back to the early eighties to see what the effects will be when it does, and magnify them, to get some idea of what's coming.

A cycle of "boom" followed by one of "bust" is really a poor way to operate any economy. And a highly deceptive one to those who think they can profit mightily enough in the good times to tide them over the bad. In reality, they can't. And it becomes ever the harder with each successive "boom-bust" cycle.

The "prosperity" that Vancouver, and our Alberta neighbours are currently said to be enjoying, is really no more than very thinly disguised "inflation". Prices, of everything, have risen far faster than incomes. Even though the latter have tried to keep pace, they can not.

An ever greater part of those prices can only be met by expanding debt, secured for the most part by 'inflated' property values. It is unsustainable. As the current crisis in the USA should amply have demonstrated.

Even at the current low interest rates, debt servicing charges are sucking out an ever greater portion of the worker's income. Leaving him ever the less to spend on his current and future needs.

While, in the case of businesses, its endlessly adding to the costs that will flow through into the prices those incomes still have to liquidate. If the business is to stay in business, that is.

As businesses try to reduce their costs, they find that there is no way that their improvements, their 'capital costs' spent for more and better technology, can be recovered.

For the only way for them to really reduce costs is to somehow reduce current labour costs. Either through layoff, wage reductions, outsourcing (either domestic contracting out, or to foreign countries, etc.)

Unfortunately, while this may seem desirable to them as regards their individual business, the very incomes they are reducing are the EFFECTIVE DEMAND for the consumption of the product they're producing. How can they sell, when there's no incomes available to buy?

Isn't it high time we stopped and focussed our attention on what really goes on in the WHOLE ECONOMY, and take some corrective measures to even things out?

I know what I'm saying is small consolation right now to someone who's lost their job, and faces their un-reduced monthly bills with little or nothing coming in. But surely we are not so collectively stupid and shortsighted that we can go on believing that all that's needed is for someone to come up with another "make work" project, and all will be right in the world.

I agree Socredible!
What happens after 2010 is the big question, and I don't think the the Campbell crew or anyone else is paying enough attention to that.
Eventually,"make work" projects all crash and burn,and the end results are not usually pretty.
Long term sustainability is the only thing that works to any degree and I don't think we have anything near that yet.
There is in fact a major downturn looming on the horizon, and banking on the 2010 Olympics to offset that could be economic suicide.

What are they wanting the govenment to do? The govenment cant do anything...Its the business, simple... forestry is in the toilet..sad but true.

The government can do plenty. For the immediate and forseeable future, it should pay the people who are unemployed an 'income' closer to what their regular wages were than the reduced amount currently available as an EI benefit.

That's not a perfect solution, and it does little to assist owner-operators, or those not covered by EI, but it's a start.

And at least keeps the towns alive, food on the table, mortgages and other time-payments current, and those who provide goods and services in the small towns more able to weather the storm and not face certain financial ruin trying to continue to do so.

And I'm sure there are other ways that could be devised in which laid-off owner-operators could also be assisted.

There should be NO "moral" question of whether receiving an income, or other assistance this way, without being made to do some additional WORK for it first, is right or not. We shouldn't be concerned in the slightest about that at a time like this. But no doubt some will be.

Well, just tell them to come up with something better then. Something that solves the immediate problem, and doesn't just defer it, and make it larger. As spending any 'government' money on what are essentially "make work" projects will be certain to do.

So far as the EI money is concerned the people who now need it have already 'worked' for it. The money in the EI fund was deducted from their, and everyone else's, GROSS earnings when they were working.

An additional amount in the ratio of 1.4 to 1 was collected from their employer. For every dollar paid by his employees as an EI deduction the employer is required to contribute an additional $ 1.40.

Both of these amounts are recorded as business COSTS. The GROSS PAY and the ADDITIONAL DEDUCTION FOR THE EMPLOYER'S EI CONTRIBUTION. And BOTH will have to ultimately be included in, and recovered from, PRICES charged the general public for goods and services we all consume. Or the business is kaput. It makes no difference if most of MacKenzie's lumber is 'exported', for these chareges will then appear in the prices alternate goods that are 'imported'.

To meet those PRICES, however, the ones that include these deductions as COSTS, the employee has only his NET pay.

EI, like Income Tax, and CPP, are charges highly akin to highway robbery. In effect, we pay them twice. Once from the deduction from our GROSS earnings, and once again by the inclusion of these 'costs' in the PRICES of the things we need to buy. No one, especially at a time like this, should have the slightest compunction in demanding back what is already rightfully OURS.

For the government is forcing each and every one of us to try to liquidate 'financial' costs impressed into retail prices with incomes that are already, (and not for this reason alone, either), inadequate to do so.

I know it is hard times, however, EI is what everyone else gets once laid off.

No special treatment, it is a fair system province wide and should remain as such.

Getajob, if a building in Prince George suddenly burst into flames and burned down we might take a look at why, and whether there was something wrong with its construction, whether the building codes had been followed, was it wired properly, etc. If it was a commercial building, or a school, or arena, hotel, etc. we might all suffer some inconvenience from its loss. But likely we could still carry on. Most of us, anyways.

The rectification of the loss would be between the Insurance Co., if the building's owner carried insurance against such a possibility, and the party, or parties effected. There would be "no special treatment", the terms of the insurance contract would be applied just as stated in the policy. It might take some time for that to happen.

But what if EVERY building, or nearly EVERY building in Prince George caught fire and burned down all at once? Would ALL the people that were effected be content to sit outside, unable to do anything until each claim had been processed and their insurers made good the loss? COULD they still carry on?

Would they be content if the Insurance Companies said, "Sorry folks, we know you're suffering with a City that's no longer functional, but "there's no special treatment", you'll just have to wait"?

I am really impressed with this blog site. Never realized how many stupid, ignorant people existed in our city. On the otherhand, there are a lot very intelligent people, who has the ability to think out side the box.

People get layed off everyday in this country.Some save for rainy days some do not.
Moral of story...It is sad when anyone wakes up without a job,however thank god you can draw EI.

Getajob, if we ALL "saved for rainy days", there'd be a whole lot more of us "unemployed". Permanently. Think, man, think!

What is it that drives the economy? What is it that politicians, and economists, and all others who are supposed to be able to think get all in a lather about when it doesn't happen? It's consumer SPENDING!! Not consumer SAVING. You have to look at the "big picture". Look at the 'economics', forget about some outdated, riduculous 'moral' necessity to make people 'work' before they can have an income.

Posted by: socredible on May 23 2008 8:32 AM
Getajob, if we ALL "saved for rainy days", there'd be a whole lot more of us "unemployed". Permanently. Think, man, think!


So you are telling me that, not saving ones money is not thinking? Holy thats a twist.
People in that town that saved their coins and never spent silly, are not to worried about the lay off."Well the ones i know anyway"
If i was in debt for sleds,Rvs,Bikes and so many other useless toys, then, i guess i would be concerned.

But it still comes back to this..Forestry is done for. People get let go,it's life. This is business. The govenment of this province is not required to bail Kenzie out. EI is fair for all. Lots of work else where if they want it. It is sad yes,however it has happened prior and it will continue.

...........and you can bank on that!

No, I'm not trying to tell you that "saving one's money is not thinking, " Getajob. We all save for things we want, or to try to build a nest egg against that rainy day, should it ever come.

What I am asking you to consider is what the effect would be if everyone DID save to the degree many seem to think they should under the financial system we have, as it's presently constituted.

Virtually ALL 'money' comes into being as a 'loan' from the Banking system. What a business borrows, and pays out in the course of its doing business, are recorded as its 'costs'on its books.

To repay what has been borrowed, all these 'costs' have to be included and recovered through PRICES taken from the public who consumes that business's product.

Ideally, if ALL 'costs' were, as they once were, CURRENT labour costs, then those costs would be equal to the INCOMES consumers receive that will fully liquidate them through PRICES, as goods move from production through into final consumption. We produce to consume.

In our modern world, all 'costs' are NOT CURRENT labour costs, i.e. 'distributed' as incomes. Many are allocations in respect of 'capital costs'. Many others are for things like EI and Income Tax and CPP deductions. Things that are charged, or 'costed', into the price of everything we buy, but have not distributed anything in the way of 'incomes' capable of fully liquidating them.

If we 'save', the money that has already been "costed" into the price of some product cannot be fully recovered in "price".

Furthermore, if your 'savings' are invested, and not spent on some consumer good, this investment creates another set of "costs" which will have to be recovered in some other, future product's price.

Yet the only way that can happen is if there is "new money" coming into the system as further bank loans. Each time savings are re-invested this problem re-occurs. It is why our total DEBT, both as a nation, and as individuals has grown so large, and is, in it's totality, impossible to repay.

The correction to the problem is not to forbid people from 'saving', (though that's been tried, and failed, in times past), nor in not 'investing' their savings.

It is to have a proper set of National, (or Provincial), accounts that properly reflect what is going on in the whole economy. And from which "new credit" not "costed" into any production can be distributed to Consumers, each and every one of us, to accomodate such things as individual savings and their re-investment. To allow "incomes" to be able to fully liquidate "prices", without ever increasing debt strangling us all.

You make some good basic points,however, i must be honest ,,,i'm worried about where i will be in the food chain, not where others will be.

Fair enough, that's a concern we all share in regards to where each of us might be individually in that "food chain".

So some of us do what we think is the prudent thing to do, and we 'save' for that 'rainy day'. Most of us, if we can, probably.

Some take it to extremes, like the stories that appear in the newspapers every once in awhile.

Ones about some old biddy found dead of pneumonia and malnutrition in her unheated, low-rent, dingy, tenement apartment. Where she'd been subsisting on pet food, and didn't have a stitch of clothing or furnishings in the place that wasn't someone else's cast-offs.

Ones about how the authorities, when searching through her effects after thinking how terrible it was for anyone to HAVE to live that way, come across a bank book that showed she has a couple of million bucks on deposit in the bank.

And not only that, was banking most of her pension, or social assistance cheques, or whatever other sources of income she had.

Now if you brought somebody like that back to life, if you could, and asked her, "Why? Why with so much in savings were you ever living THAT way?", what do you suppose she'd say? My guess is she'd say something like, "Because if I spent any of my savings I'd be poor. And I don't want to ever be poor."

But if she was really "not poor", was she then 'wealthy'? You tell me. My perception of 'wealth', a word which comes from our conception of "well-being", is that it's what we CONSUME. Not what we HAVE.

Does the roast in your freezer ever nourish you while it's in your freezer? Or only after it's thawed, cooked, served, and eaten? What really adds to your 'well-being'? Having it, or consuming it?

Now if you and a couple of companions were lost in the middle of the Sahara Desert, with one canteen of water amongst you, and not knowing when you might be rescued, you might certainly find it prudent to 'save' your water by rationing it.

But if you and the same two others were adrift in a lifeboat in the middle of Lake Superior, again uncertain of when you might be rescued, and one of you suggested it might be prudent to 'ration' your water, the other two would look at him like he was nuts! You've got a lake under you you couldn't drink dry in a thousand lifetimes!

And that's just about where we are with our conception of 'savings' in an economy that has the potential to PRODUCE more than we could ever CONSUME, but not only can't, it also has a flawed financial system in place that erodes the purchasing power of what our savings might eventually buy about as fast as we put them away.

There ARE ways to correct that, to make 'savings' be what they properly should be, and truly a benefit those who have saved. Even though the supposed need to save for that 'rainy day' would be eliminated if we ever implemented them.

Lol yes you make a point but back to the start, i will look out for my own spot in the food chain.I guess i just gotta worry about where i fit in....cheers