Lethbridge Herald, The (Newspaper) - August 30, 1974, Lethbridge, Alberta
4-THE LETHBRIDGE HERALD-Friday, August Joint auto agreement should be scrapped Resignation in order The Canadian Wheat Board is responsi- ble to the government of Canada and its members are appointed by the government. Its function is to take custody of prairie grain and to market it, returning the proceeds, less costs, to the producers. It is only natural that the board should be gravely concerned not only about the current tie-up of grain terminals at Van- couver but about the recurring labor problems there that have made steady and dependable grain shipping im- possible. And it is only natural that the board, being so concerned, should com- municate its concern to the government, which is highly involved in responsibility for the problems. The chairman of the board this week wrote such a letter to the minister in charge of the board, Hon. Otto Lang. Then the letter was made public, presumably by the board, not by the minister. This is highly irregular not the writing of the letter or its contents but its release to the public. The letter is an implicit rebuke to the government for letting the problem get out of hand. If submitted confidentially it is the kind of advice the minister should appreciate. But to make it public comes close to a public criticism of the govern- ment and in some circumstances should be accompanied by the chairman's resignation. The government's competence to cope with the problem is more and more in question. Inexcusable waste At this time of food shortages and high prices, waste is inexcusable. The report that nine million eggs being held by the Canadian Egg Marketing Agency went rotten and had to be destroyed calls for more of an explanation and for reassurance that it cannot happen again. The Canadian egg industry, plagued for years by unprofitable prices, by sporadic surpluses and by interprovincial marketing board confusion, is still in trouble. The CEMA was supposed to im- prove conditions, for both the producer and the consumer. Letting a lot of eggs become rotten suggests that the new bureaucracy is not functioning properly. Cuban boycott anachronistic The Western Hemisphere boycott of Cuba is a bankrupt policy. This week's decision by Panama to restore normal relations with Fidel Castro's government brings to seven the number of members of the Organization of American States to breach unilaterally the 10-year-old OAS political and economic boycott of Cuba. By the end of the year it is ex- pected that there will only be a handful of holdouts still unwilling to abandon the boycott. Speculation is bound to centre on when President (lerald Ford will also make the reasonable move of leading the United States into full diplomatic recognition of Cuba. After President liichard Nixon tiok the spectacular steps toward thawing the freeze on relations with The People's Republic of China and the Soviet Union it has been clear that the continued refusal to change the of- ficial attitude toward Cuba is anachronistic. Apparently two things prevented the logical step of recognition from taking place: Richard Nixon's personal dislike of Premier Fidel Castro and Bebe passionate espousal of the cause of the anti-Castro Cuban refugees. But now Nixon is out of office and his friend Rebozo hasn't any purchase on government policy. It should be easy for President Ford to recognize Cuba as part of his fresh approach to old problems. The fear that Premier Castro might export his revolution has almost com- pletely disappeared. There's been no real evidence of external revolutionary in- surgency since the pathetic attempt made by Che Guevara and his little band to infiltrate Bolivia several years ago. Besides, the efficiency of rightist dic- tatorships has overwhelmed the impact of Castro's leftist dictatorship. Cuba might never have fallen under Soviet influence if the U.S. and other members of the OAS had not imposed their boycott. It might even yet be wean- ed away from that influence by allowing the natural ties with the Western Hemisphere states to develop again through trade and cultural exchange. There are signs that this is what Premier ('astro would like. So with the old policy regarding Cuba coming apart and precedents already set by the Ford administration for making fresh initiatives it shouldn't take long for the new president to act in establishing a more realistic and credible policy. RUSSELL BAKER Laboring for love Early in life, most of us probably observe an unhappy relationship between labor and wealth to wit, the heavier the labor, the less the wealth. The man doing heavy manual work makes less than the man who makes a machine work for him. and this man makes less than the man sitting at a desk. The really rich people, the kind of people who go around on yachts and collect old books and new wives, do not labor at all. The economic reasons for dividing the money this way are clear enough. One, it has always been done that way; and two, it's too hard to change at this late date. But the puzzl- ing question is why, since the money is parceled out on this principle, young people are constantly being pummeled to take up a life of labor. In any sensible world, the young would be told they could labor if they wanted to, but warned that if they did so it would cost them. Not here. In this country, labor is talked about as if it were something everybody ought to be dying for a chance to get into, like ocean-front real estate. We are forever haranguing each other about the nobility of labor, the dignity of labor, the rewards of labor, honest labor, decent labor and so forth, until all the starch is taken out of any poten- tial upstarts who might be tempted to ask the sensible question: "How come, if labor is such a worthy way to spend your life, the pay isn't The answer they would get, of course, is, "Labor is its own reward." I used to scoff at this when I was innocent. "I don't want the reward of I would say. "I want wealth, yachts, old books, new wives." And I would say, "Look at J. Paul Getty; he toils not, neither does he spin, yet his is the wealth of Croesus. I want to be a non-toiler like Getty and have the reward of cash." At first, people dealt with me patiently, and by people I mean statesmen who were wise beyond my years and understood wherein lay happiness. they would exclaim. "Poordelud- ed lad! Behold the digger in his ditch. Does he not partake richly of nobility and dignity? Is poor Getty recompensed for being denied all that by the cold assuagement of To me, that cold Assuagement seemed ade-, quate compensation for missing out on blisters, and I determined to sacrifice a life of work for the Calvary of great wealth. It was a dangerous decision, and quickly aban- doned, for fierce politicians began going about the country suggesting that such behavior was unwholesome, cynical and possibly subversive. In brief, I undertook the joys of labor, join- ed sundry unions which sent regular mailings extolling my dignity and proclaiming dues increases, and cunningly sneaked a sinuous route from bearer of hundred-pound flour sacks (that's to journalists (that's while enlarging my wealth in propor- tion to the decrease in my labors. I am still not near the yacht class, for- tunately for dignity, but I do have a canoe and have lately begun acquiring mildewed book- of-the-month club selections of the late 1930s at garage sales. The unions' desire to keep us persuaded of the splendor of labor is understandable. If everybody decided to be rich instead of working, the unions would go out of business. Union men work just as hard as the average middle-management executive and have canoes, too, and it is only natural that they not want to give up the nobility of labor for the cold assuagement of lucre. What is baffling is the government's at- titude in all this. The government cannot af- ford to have a country made up entirely of rich people, because rich people pay so little in taxes that the government would quickly go bankrupt. This is why government men always tell us that labor is man's noblest calling. Government needs labor to pay its upkeep. It seems to me that government could make a concession here. Its present tax system is rigged so salaried income, which is the kind of income labor gets, is taxed at higher rates than rich income. It would be a simple matter to switch the loopholes. Rich income would be taxed at the high rate salaried income now pays, and salaried workers would get the kind of loopholes the rich now have which is to say, loopholes that make it certain that somebody else will have to do most of the tax-paying. I don't expect the government to leap at this sensible suggestion. I expect it to reply that the rewards of labor are so rich we should all be glad to pay double for them, and anyhow, hasn't government already given us labor day? By Bruce Whitestone, syndicated commentator Of late, many are now ex- pecting that the fresh man- date of the Trudeau govern- ment will lead to a re- examination of some political- ly sensitive issues. One of the first to be considered is modification of the 1965 Canada-U.S. automobile trade agreement. This agreement did not, as was widely believed, introduce free trade in automotive products between Canada and the United States. To term the arrangements a free trade agreement was to misrepresent not. only the terms, but also the nature of the pact. It merely set up some incentives for manufac- turers of automobiles to in- dues them to expand their manufacturing operations in Canada. These incentives were in the form of a remis- sion of our import duties which had been subject to a per cent levy. The U.S. government, as its part of the bargain, agreed to lift the per cent duty that it imposed on autos and per cent duty on auto parts imported there. The objectives of the Cana- dian government at that time were supposed to be three in number: the difference between the selling prices of automobiles in Canada and the United States was to be narrowed; more jobs in manufacturing were to be created, and the deficit in automobile trade incurred bv Canada was to be reduced. How well did these plans work out? It is well nigh impossible to determine if the price spread between U.S. and Canadian car prices was in fact reduced. While the manufac- turers claimed that such a reduction has taken place, because of the variation in models, prices, delivery charges, and sales taxes, the whole question has become "I suppose there will be those who will try to raise a stink about it Immediate economic revision needed By William V. Shannon, New York Times commentator WASHINGTON How long will it be before the Ford ad- ministration and the Democratic Congress decide to impose mandatory wage and price controls? Let us say another seven months. By next March, prices will still be rising at more than 10 per cent a year and unemployment, now above five per cent, will be above seven per cent. By then, the already demoralized financial markets will need only one failure by a sizable bank or corporation caught in the high-interest rate squeeze to turn their steady bearish retreat into panicky flight. Under those grim circum- stances, the Democrats in Congress, who are now silent or only murmuring about the need for an aggressive and comprehensive economic program, will be yelling for one. The president, being the responsive politician he has already shown himself to be, will smoothly accommodate himself to reality and call for measures that this week he is insisting he has no intention of seeking. There is no need for this grim scenario to be acted out. Much of what needs to be done is already evident. What will probably be done next spring could be done now. President Ford has missed a major opportunity to act in timely fashion. He should have been thinking about his economic program during the closing weeks of his vice- presidency and been intellec- tually prepared to present such a program in his address to Congress on Aug. 12. It is unfortunate that the economy and the society will have to suffer considerably more damage while he educates himself on the problem. In the meantime, he has chosen to retain at least tem- porarily the four economic policymakers he inherited from Mr, Nixon Secretary of the Treasury William Simon, Economic Counsellor Kenneth Rush, Budget Direc- tor Roy Ash, and economic ad- viser Alan Greenspan. Keeping them on was a. mis- guided gesture toward con- tinuity. Given the dismal economic record of the second Nixon administration, con- tinuity was the last thing anyone should have wanted. Insofar as he heeds it, the bad advice of this extremely reac- tionary quartet can only retard President Ford's economic education. The president hopes to avoid mandatory controls by public pressure and private per- suasion. Sophisticated observers have little con- fidence this approach can do much good. The "economic summit meeting" is likely to be only a grand rally of conflicting opinions. Unback- ed by the force of law, any "social contract" between labor and business to restrain prices and wages voluntarily probably cannot be sustained for long. On Saturday, President Ford signed into a law a bill establishing a special agency to monitor wages and prices. But Mr. Ford said the agency was not to be regarded as a step preliminary to es- tablishing another system of mandatory wage and price controls. Mandatory wage and price controls are, of course, only one element in a national economic program. Other elements are clearly desirable. All wage increases above a certain level such as five per cent might by law be paid only in individually owned U.S. Savings Bonds which could be redeemed in five to eight years when inflationary pressures would presumably have eased. Compulsory deferral of extra income would make strict wage control more acceptable to workers and managers who are trying to save for their old age or their children's education. At the same time, there should be immediate tax relief for the poor and the elderly. Since these low- income persons have to spend most of their earnings on necessities, they have been hardest hit by the sharp rise in the cost of food, heat and electricity. It is uncon- scionable that they should be punished much longer by inflation. THE CASSEROLE One of the many balances nature seems able to maintain is the one between absteminous and hedonistic centenarians. Readers will have noted that when those reaching the 100 year mark are asked and they always are to account for their longevity, half of them attribute it to strict avoidance of alcohol, tobacco and all ex- cesses, while the other half claim they owe it all to drinking, smoking and raising hell at every opportunity. aluminum wiring, which he says may make them "time bombs ready to go up in smoke." The chief electrical inspector for the province doesn't think it's all that bad, and that the rather frequent fires in Calgary buildings with aluminum wiring are probably the result of "faulty workmanship or failure to use CSA-approved materials." That's com- forting if you can be sure you don't live in one of the "time bomb" houses. A national economic plan should include fiscal restraint, but also an easing of interest rates. On July 23. Sen. Charles Percy, R-I11.. wrote President Nixon outlining ways in which the current budget for fiscal 1975 could be brought into balance. Sen. Percy proposes a budget reduction of billion by deferring or stretching out Army Corps of Engineers civil construction projects, inter- state highway construction and military procurement. He would raise billion added revenue by repealing the federal deduction for the pay- ment of state gasoline taxes, raising the minimum income tax for the very wealthy, and repealing depletion allowance and other special tax benefits for the oil and gas industry. This relatively painless package of-budget reductions and tax increases could be used to offset the cost of tax relief for low-income groups that from the standpoint of social justice is essential. Finally, President Ford has to arouse the public to a renewed awareness of the energy crisis. The country ought not to be allowed to go off daylight saving time in the winter, go back to buying oversized, gas-guzzling automobiles, and otherwise resume energy-wasting habits. An intensive oil conservation program aimed at ultimately reducing U.S. oil imports from the Middle East to zero would relieve one inflationary pressure. If the Ford administration and Congress fail to adopt tough wage and price controls, tax reforms, an eas- ing of interest rates, fiscal restraint though not a balanc- ed budget, and energy conser- vation, the nation faces a roaring inflation, savage rates of unemployment, and misery for the poor and the elderly. The time to act is now, not next spring. too complicated to unravel. It is further confused by the variation in inflation rates between the two countries over the past decade and Ihe on-again, off-again price controls imposed by the U.S. on its automobile industry. In any event after nine years of this plan, retail car prices in Canada remain significantly above those in the U.S. Industry sources estimate that about new jobs were created by the automobile agreement; Again, one cannot be certain that the same number of jobs would have been created anyway by the long term growth of the automobile industry in Canada. It is estimated that the rebated tariffs averaged about million annually, so the Canadian government gave up in tariffs about for every job created, rather a steep price to pay. In 1965, Canada's automotive trade deficit with the United States was million. However, in 1973 the trade deficit rose to a new peak. million, and is now running at triple that 1973 rate! Thus, little has been ac- complished on this score. What have been the other implications of the 1965 trade pact9 Under the 1965 agreement. North American auto manufacturing became vir- tually a single production unit and makers shift production at will. While northbound shipments of components and finished vehicles continued unabated reflecting strong Canadian car demand, the reverse flow has slowed because of the U.S. car slump. There is more trouble down the road. Although GM of Canada raised Vega (its small car) exports from 16.000 to 55.000 this year, the company will shift its entire Vega and Pontiac Astre production to the U.S. for the 1975 model year, depriving the Canadian export market of an important and growing sales segment. There will be litHe to take up the slack Created by this huge loss of production here. Then, over the past few years 95 per cent of all North American car investment has taken place in the United States, even though Canadian vehicle sales represent about 10 per cent of total North American sales. There are other wider im- plications of this plan which should be recognized. The integration of the North American automobile in- dustry led to demands for wage parity with the United States. Our economy could not afford the same wage rates as the U.S. because of our higher cost of production. Nevertheless, the demand for wage parity has been met in the auto and other industries as well. This has greatly add- ed to the burdens on our economy. Further, the U.S. attempted to pressure Canada in other ways, ostensibly because of the "concessions" that the U.S. had granted to us. Washington officials, par- ticularly the then secretary of treasurer. John B. Connally, demanded that Canada change some of its trade practices. Thus, closer examination of the Canada and U.S. auto pact reveals that the benefits were derived almost entirely by the U.S. auto manufacturers. The U.S. and Canadian economic systems became more interdependent than otherwise would have been the case. This added another un- necessary, destructive ele- ment in our fight to maintain our identity and existence. Economic advantages to Canadians seem to be few if any and. unfortunately, Canada has been prevented from developing an indepen- dent automobile manufactur- ing operation, even though smaller nations such as Sweden have been able to do just that. All in all. it appears that the most logical move by the Trudeau government would be to scrap the entire automobile agreement. In Spain, an architect who designed a building that collapsed has been jailed for four years and fined nine million pesetas. Now if someone can find the economists who designed this kind of economic system Calgary's senior electrical inspector says half the new houses in Calgary have World food experts are at it again, making people feel uncomfortable. They've told the Midwestern Governors Conference that North Americans soon will have to choose between cutting their consumption of energy or letting Asians and Africans starve. A fine way to talk about people who keep a mere 35 million dogs as pets, reserve only five or six million acres of prime land to grow tobacco, and use scarcely a quarter billion bushels of grain a year to make beer and spirits. The Lethbridge Herald 504 7th St. S. Lethbridge. Alberta LETHBRIDGE HERALD CO. LTD. Proprietors and Publishers Second Class Mail Registration No. 0012 CLEO MOWERS. Editor and Publisher DON H PILLING Managing Editor DONALD R. DORAM General Manager ROY F. MILES Advertising Manager DOUGLAS X. WALKER Editorial Page Editor ROBERT M FENTON Circulation Manager KENNETH E. 8ARNETT Business Manager "THE HERALD SERVES THE SOUTH"