Editorial

Thedollarandfreetade[ eee
WEE

The Bank of Canada is an institution worth following these days. Its two-
pronged tactic of allowing both the dollar and interest rates to rise requires close
examination.

According to the prime minister, a higher dollar is good for us. It reflects
confidence in the expanded trade opportunities his free trade agreement is
suppose to provide. But just how good is a high dollar?

In the past nine months the dollar has gone from $.75 U.S. to more than $.80
U.S. The dollar’s sharp rise has little to do with the usual ups and downs of a
capitalist economy. The fact that it hovers at the highest level in the past 10 years
is the result of a deliberate policy of the Bank of Canada, directed by the
Conservative cabinet.

Bank governor John Crow says he’s upping interest rates to keep a lid on
inflation “caused” by rising wages. In truth, inflation at 3.8 per cent is relatively
low, and interest rates are already artificially high. A look behind the scenes
Suggests that high interest rates have little to do with stifling inflation and
everything to do with inflating the value of the dollar.

Why? The bank’s policy is a boon to those “Canadian” corporations who are
expanding into the United States. The higher the dollar the more land, equip-
ment, business and labour they can buy south of the border. But for working
Canadians, the combination of a high dollar and higher interest rates. means a
decreased demand for Canadian exports and less investment in Canada result-

ing in job losses, higher housing costs, mortgage rates, and a more favourable a
climate here for foreign, mainly U.S., goods. =a
But the true explanation behind the bank’s actions can be found in the free
trade agreement. Reagan and his boys have made no secret of their distaste for f=)
our low dollar. Given Mulroney’s track record in complying with U.S. whims, & iL . ONE
why would American capital not,make a rising Canadian dollar contingent on
support for the trade package? After all, they were not shy in forcing their other EDITOR Published weekly at
“friends,” Japan and West Germany, to realign their monetary policies when Sean Griffin Sabet Hactons pleat
they were disadvantageous to the U.S. ASSISTANT EDITOR. | V5K1z5
In Canada’s case, however, there is another dimension. If the agreement goes Dan Keeton Phone (604) 251-1186
through, the ability of future governments to reverse the dollar’s trend will be BUSINESS & CIRCULATION MANAGER Subscription rate:
extremely difficult. Mike Proniuk ~ = = Sept acre
The Tories are attempting to cover up their actions with an attack on wages. GRAPHICS Seisaraelaes hel
Working people will have to enter the debate to expose these made-in-the-USA Angela Kenyon registration number 1560
policies for what they are. =

ith almost no media attention,

Vancouver city council last week
quietly put the finishing touches on a two-
year services reduction program by chop-
ping $285,700 — that means seven full-
time permanent positions — from the city
planning department.

Granted, this really wasn’t news in the
“new” sense of the term. The program to
trim almost $5 million from the city’s
annual operating costs was initiated by the
dominant Non-Partisan Association on
council last year. Introduced a mere two
days after council had adopted a stand-pat
Operating budget through the process of
public debate, the cutbacks program,
hammered out in secret meetings of some
council members and department heads,
caused a political furor with dozens of
trade unionists and community represen-
tatives chastising the NPA for the needless
cutbacks.

Those people, along with the opposi-
tion aldermen from the Committee of Pro-
gressive Electors, knew the political nature
of the cutbacks. The fact that city council
under COPE and its political allies had for
Six years maintained jobs and services dur-
ing the bleakest years of provincial
government restraint constituted a politi-
cal and ideological embarrassment for the
ruling Socreds. An operating budget bal-
anced with the judicious use of interest
revenue from the city’s property endow-
ment fund proved a simple refutation of
the monetarist thesis that government
cutbacks of social services and jobs are
“necessary.” It was living proof that it isn’t
a lack of money that is the problem; it’s
how you use the money that is available.

The fact that the cuts were political has
been underscored by a council committee
approval last week of a request from the
planning department for six full-time tem-
porary positions to last a possible 15

_ People and Issues
ccc a a

months. The hirings are necessary, the
department argued, to deal with the flood
of rezoning applications that have fol-
lowed in the wake of developments such as
the Expo lands and Coal Harbour pro-
jects. And the estimated cost of the tem-
porary hirings? When you add up the
figures it comes to $292,460. That’s $6,760
more than the money saved by chopping
‘the seven permanent jobs.

COPE’s Ald. Bruce Eriksen points out
that approval by council is almost certain
since the finance and priorities committee
comprises all council members.

Eriksen also notes that the Vancouver
Municipal and Regional Employees Union,
which represents the city’s inside workers,
objected to the original staff cuts, and for
obvious reasons. The cuts result in the
kind of piecemeal job hiring this situation
represents, and lead to contracting out
services of formerly union jobs.

All of which makes yet another reason
to work hard in this civic election to ensure
that the NPA majority on council is cut.

re, See

yy eaders with an eye for design may
have noted a somewhat patchy look
to last week’s Tribune. To wit, some head-
lines were not set in the usual typeface we
use, and were unduly undersized.

The reason for that unfortunate state of
affairs was that our typesetting machine
picked press night as the time to malfunc-
tion, seriously enough that we had to rush
the remaining typesetting work at College
Printers, where the Tribune is printed.
Since then “Nick,” the affectionate name
for our AM 5810 phototypesetting

machine — who is after all five years
old — has been repaired and is ready for
action.

Our typesetting woes were responsible
for the byline being left off last week’s page
8 article on the situation in Poland. It was
written by Mike Phillips of the Canadian

Tribune.

sy ee eee

till on the subject of ourselves, we

acknowledge that this issue is, con-
trary to custom, limited to eight pages, the
size accorded summerissues. Normally we
expand to our customary minimum of 12
pages once September rolls around, but
unusual staff shortages will keep us to
eight this week and next.

This is due partly to the departure of .

Dave Carman, a temporary employee
whose design skills were chiefly responsi-
ble for the new look the Tribune has
acquired during the past year, and whose
talents will now be employed on his new
job. Meanwhile editor Sean Griffin is in
China as part of a delegation, the latest ina
series which have visited the country at the
invitation of the Communist Party as part
of the recent and welcome renewal of rela-
tions with Canada’s Communists during
the past two years.

Sean will soon be back and we’ll have

some first-hand reports of the process of |

socialist renewal in the world’s most popu-
lous country.

x ox &
At observations on how the capital-

ist system depends on your misery.

courtesy of the Globe and Mail’s Report on
Business section:

An article in the Sept. 3 issue observes
that unionized workers are achieving
higher than usual settlements at the bar-
gaining table, especially in Ontario where
the unemployment rate is lowest. This is
due to an accelerating economy, which
one would think is what capitalists want.
But not so, according to Bank of Montreal
economist Lloyd Atkinson. He says that
too rapid a growth is responsible for the
latest round of interest rate hikes. From
the bank’s perspective a little more unem-
ployment and a subdued work force
would help a lot in the loans department.

But who’s really responsible for the
growing inflation? The Globe piece
acknowledges high corporate profits and
the fact that while hourly rates workers’
wages have risen 8.4 per cent in the past
three years (according to a Labour Can-
ada survey), executive wages soared at
22.6 per cent.

How well liked is high unemployment?
Another article in the same issue reports
that Wall Street financiers and other
North American stock markets are cele-
brating because the U.S. national jobless
rate rose 0.2 per cent to stand at 5.6 per
cent last month. Because that figure
showed lower than anticipated economic
growth, the Federal Reserve Board did not
have to raise interest rates, the article
states. Lower interest rates spurred stock
and bond prices, creating a bullish market.

And here we thought economic growth
meant prosperity for all. Instead, more
folks on the welfare rolls means more
profit at the stock exchange. Or, as John
Ing of Maison Placements Canada Inc.,
puts it (without a trace of irony): “Bad
news on the economy is good news for the
market.”

4» Pacific Tribune, September 7, 1988