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Updates from the Prairie Centre Policy Institute from Regina, Saskatchewan.
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web posted December 23, 2002
Will history repeat itself?
The viability of the Saskatchewan Wheat Pool (SWP) is often in question these days. Recent news headlines report the Calvert government meeting with the SWP to talk about possibly bailing out this Prairie icon. It would appear that the SWP is in need of a life support system and the Calvert government is considering using taxpayer dollars to save it. If it happens, this would not be the first time that the Pool was rescued by the government.
In 1930 the federal treasury guaranteed the Pool's loans and saved it from certain death.
The first signs of trouble appeared in 1928, when the Pools found themselves paying out more to their farmer-members than they could recoup in world markets. Britain, Canada's biggest customer, was taking advantage of a bumper harvest and Argentina was selling wheat up to 25 cents a bushel cheaper than the Pools were prepared to go.
When the price slid down to $1.06, a shocked U.S. Government temporarily suspended trading until the price recovered, while the Pools held their own inventory in reserve. The Pools even took the unprecedented step of entering the trading pit of the Winnipeg Grain Exchange (a free market institution they heartily loathed) to buy six million bushels at $1.35 in an attempt to stimulate speculation that the price would recover.
At first the buy-up seemed to work, as the price was bolstered considerably by a drought. A frenzy of speculation ensued and the July price was driven up to $1.78. But it was all theoretical "paper" value, because European customers had no intention of actually paying this much. The Pools entered the crop year of 1929/30 $69 million in debt to seven Canadian banks. Then, despite the Canadian drought, the cash trading price continued to sink. By November, the British would pay no more than $1.28.
Events coincided that autumn to make matters worse. Europe enjoyed a spectacular harvest. Meanwhile, the world-wide financial collapse of October 29, 1929 ("Black Friday") prompted European countries to protect their own farm economies by raising tariffs. In Canada, May futures remained at $1.25, because buyers were all too aware of the huge Pool reserve, and the European tariffs.
The longer the Pools held on, the worse the situation got. They turned in desperation to the three prairie governments when in midwinter the banks ordered them to sell their wheat holdings. The premiers agreed to pacify the banks by guaranteeing a 15% margin on reserve wheat (i.e. paying them at least 15% of its value) and the Pools would sell what they could to cover it. But as the price edged down, total grain debt to the banks rose to $130 million, of which the Pools owed $99 million.
On March 12, 1930, wheat slipped below $1 for the first time since 1923, the year the Pools were born. Henry Wise Wood, the Carstairs farmer who was the founding president of the Alberta Pool, declared stubbornly, "It looks like we must sit on our bag of wheat."
It did them little good. In 1930, Russia suddenly reappeared as an exporter. As the depression deepened, the German and French tariffs rose, and Spain banned wheat imports until its own domestic price returned to $1.76. The Pool price was beaten downward to 50 cents. On November 18, the price in the Winnipeg Exchange collapsed even further. Cash trade at Thunder Bay paid only 55 cents. The banks ignored the Premiers and moved to close the Pools. Only the intervention of Prime Minister R.B. Bennett prevented it.
All loans from November 20, 1930 would be guaranteed by the federal treasury.
"Where Do We Go From Here?" is a feature service of the Prairie Centre Policy Institute.
web posted December 16, 2002
Kyoto spin machine triumphs
By Robert D. Sopuck
One of the big problems with "political correctness" apart from the sheer absurdity of the concept is that contrary views are stifled. Only the opinions of an anointed few are precultivated and set the grounds for "official" debates around important public policy questions of the day.
Take the global warming discussion. The Kyoto spin machine has been working overtime for the last year and the Kyoto Accord is now the law of the land. Ill bet you think that all of the questions about climate change have been put to rest by this tidal wave of propaganda disguised as scientific certainty. "Move along, folks. Nothing to see here anymore. Question period is over and Kyoto is coming soon to a country near you." Right, and gun control was supposed to cost two million dollars.
Its tough to beat a spin machine in full throttle. But theres a new welcome questioning about Kyoto. Last week, the Frontier Center hosted a breakfast meeting where Dr. Christopher Essex, a mathematician, and Dr. Ross McKitrick, an economist, discussed their just published book, Taken By Storm, The Troubled Science, Policy, and Politics of Global Warming. It is a devastating critique of the entire global warming, climate change, and Kyoto scenario.
Essex and McKitrick assail what they refer to the "Doctrine of Certainty" being pushed by the Kyoto spin machine. They describe it as something like this:
The Earth is warming and that warming has already been observed.
Essentially the authors take the Doctrine as stated above and simply, logically rip it to shreds. They point out that the "greenhouse effect," a sound bite description of what is supposedly happening, cannot be true. Real greenhouses do not work the way that the Kyoto Spin Machine says the atmosphere does. So much for accuracy.
Even more important than the content of the book is the way that Essex and McKitrick have been treated by officialdom and the media. To say that they have been ignored is an understatement. At the breakfast they told us how a well-known host of a show on our public radio network flat out refused to interview them. McKitrick said the kiss-of-death for this particular opportunity came when he revealed that he had done some work for the free-market Fraser Institute. That was enough for our host who, in high dudgeon, said that anything from "that place" has no place on public radio.
This is more evidence of an ugly and worrisome trend in our society. Those who dare question the "official dogma" are shrieked at, vilified and ignored. The same treatment was accorded Bjorn Lomborg, author of The Skeptical Environmentalist, who dared question the gloom-and-doom pronouncements of "official environmentalism." Lomborgs critics, like those of Essex and McKitrick, resorted to personal attacks instead of a real debate.
One of the endearing characteristics of our open society is that the truth ultimately comes out. Unfortunately, its often too late to forestall a huge amount of damage. The effect of Kyoto on Canada could be devastating. Like the billion-dollar firearm registry boondoggle, the truth about Kyoto will be revealed. Whether thats before or after it causes great harm is the question.
Robert D. Sopuck is Director of the Rural Renaissance Project for the Frontier Centre for Public Policy (FCPP). This article is reprintd with permission from the FCPP. For more information on the FCPP, see www.fcpp.org.
web posted December 9, 2002
Some things never change
There are some things that seem to never change throughout the centuries and government is one of them. The following are quotes from as far back as Before Christ (B.C.) to our present day. They sum up the very nature of government.
"We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle."
"The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery."
"Government's view of the economy could be summed up in a few short
-- Ronald Reagan (1986)
"If you think health care is expensive now, wait until you see what it costs when it's free."
A government which robs Peter to pay Paul can always depend on the support of Paul.
--George Bernard Shaw
"A liberal is someone who feels a great debt to his fellow man, which debt he proposes to pay off with your money."
--G. Gordon Liddy
"Foreign aid might be defined as a transfer from poor people in
--Douglas Casey (1992)
"Giving money and power to government is like giving whiskey and car keys to teenage boys."
"In general, the art of government consists in taking as much money as possible
from one group of the citizens to give to the other."
Just because you do not take an interest in politics doesn't mean politics won't take an interest in you.
--Pericles (430 B.C.)
"No man's life, liberty, or property are safe while the legislature is in session."
--Mark Twain (1866)
"The government is like a baby's alimentary canal, with a happy appetite at one end and no responsibility at the other."
"The ultimate result of shielding men from the effects of folly is to fill the world with fools."
--Herbert Spencer (1891)
"What this country needs are more unemployed politicians."
"When buying and selling are controlled by legislation, the first things to be bought and sold are legislators."
"There are certain things that are true no matter how much someone may deny them. In the economic realm, for instance, you cannot legislate the poor into independence by legislating the wealthy out of it. You cannot multiply wealth by dividing it. Government cannot give to people what it does not first take away from people. And that which one man received without working for, another man must work for without receiving."
-- Kenneth W. Sollitt
Where Do We Go From Here? is a feature service of the Prairie Centre Policy Institute. Previous commentaries can be viewed on the Prairie Centre's website at www.prairiecentre.com
web posted December 2, 2002
Rural communities march in Britain
By Robert D. Sopuck
On September 22, 2002, over 400,000 country people marched through London, England, on behalf of "rural rights." Organized by the Countryside Alliance, the march was the largest in the history of the United Kingdom.
The Countryside Alliance formed to protect a rural way of life under increasing attack from well-organized animal rights groups, environmental extremists and indifferent governments. Originally established to defend so-called "country sports" like hunting and angling, the Countryside Alliance quickly became involved with other rural issues, from agriculture to forestry, to rural housing, even to trespass laws. This evolution seems natural, perhaps inevitable. No matter what "door" is entered in rural policy, be it farming, forestry, hunting, livestock raising, you name it, it quickly becomes apparent that the entire rural system is at risk, not just one sector. In England, they have discovered that working in isolation, or better yet, fighting among themselves, merely arms the enemies of the rural lifestyle, who are legion. They picked off rural groups one at a time.
Those days are over in Britain. The Alliance deals with all aspects of
rural life, and strategies to defend it. A glance at their web site
The London march clearly crossed all income and class lines. Aristocrats and gentry marched with working people and farmers, all united on behalf of rural Britain. A parallel "Beacons" program was in place for those who could not make the march. Based on a medieval tradition English villages sett bonfires to warn neighbouring villages of attack the modern "Beacons" revival lit up the countryside as thousands of country bonfires showed solidarity with the marchers.
Press coverage was thoughtful and reflective. More than one commentator noted that it takes a lot for "Middle England" to get angry, but rural England has been pushed over the brink and the entire country had better listen. The Times of London quoted one marcher who said, "Money matters but freedom brought us here." Another headline was "Yesterday, Our Nation Spoke from the Heart," while yet another more ominous report said, "Countryside will Erupt in Fury if it is not Heard."
The same pressures are being exerted on all rural societies in the developed countries, which is why the march attracted participants from Canada, Australia and the United States. Rural Canada is an easy target. Cities hold many more parliamentary seats than the countryside. Unthinking governments catering to urban majorities think little of attacks on the vulnerable rural minority and its pursuits. The record of the last decade looks like a vicious downward spiral. Examples include the proposed Species at Risk Act, the animal cruelty act, firearms registration, anti-farming regulations, new natural resource use controls and the onerous Fisheries and Oceans regulations, and on and on. Most of these new rules come from Ottawa, where Toronto holds fifty seats and Manitoba fourteen.
To quote that great American philosopher, Woody Allen, "95% of life is showing up." The Countryside Alliance is definitely showing up on behalf of rural England. It would be no surprise to see the same thing happen in rural Canada.
Robert D. Sopuck is Director of the Rural Renaissance Project for
the Frontier Centre for Public Policy (FCPP). This article is reprinted
with permission from the FCPP. For more information on the FCPP, see www.fcpp.org.
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