Strategic Capitalism: The New Economic Strategy for Winning the Capitalist Cold War

Strategic Capitalism: The New Economic Strategy for Winning the Capitalist Cold War

• The world’s best competitors—with China in the lead—have adopted elements of managed capitalism, in which government and businesses work together toward a single aim.
• China’s objective is clear—to displace the United States as the world’s economic leader by becoming the global rule maker.
• If the West does not act soon, it stands to lose everything it holds most dear: financial prosperity, economic freedom, geopolitical power, national security, and even democratic values.

This is disruptive innovation on a global scale. But instead of companies using breakthrough products and brands to gain market share, nations are devising “game-changing” economic systems to seize influence over—and beyond—the global economy.
Bleak as the situation may be, D’Aveni contends that the West can reverse the trends currently tilting the global balance of power.
In order to meet the challenges of the future, America must revisit long-held assumptions about economics and economies, seriously consider radical alternative policies, and embrace the concept of Strategic Capitalism.

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Author d'Aveni describes how the new 'economic cold war' began, how the best competitors utilize managed capitalism (government and business working together), and what America will lose if it doesn't act soon. The Forward is by Daniel DiMico, Nucor CEO, and also is noteworthy. Mr. DiMico asserts that we are losing the trade war with China - it has already cost us millions of jobs, thereby devastating our middle class and government at all levels. He contends we need to enforce existing trade laws and agreements to right things. Second, he contends we need a national industrial strategy to replace the wishful thinking that a service-based economy can replace manufacturing as a wealth-creating engine. (Manufacturing used to be 30% of GDP, now it's at 9.9% - recommends 20%.)

Traditional American capitalism has become outdated. We have tied our hands and closed our minds - sticking to politically correct discussions. It makes no sense for a nation to maximize stockholder wealth transferring jobs and capital to foreign markets, leaving one's own people without jobs and unable to pay their mortgages. This is the equivalent of milking a mature nation (the U.S.), risking its ultimate survival. We need to stop accepting our weak economy as the 'new normal,' stop being distracted by wars, terrorism, gay marriage, etc, stop relying on theories encapsulating what used to work, stop focusing on the short term, stop believing that Free Trade with China, Mexico, etc. is not a mostly win-lose proposition, and stop predicting (hoping) that China's economic miracle will not last.

The 'really bad news' is that we're handcuffed by debts and deficits, our government decisions in these areas are made by professional politicians lacking expertise, cobbled together behind closed doors with strong (bud well hidden) biases purchased by political donors, numerous compromises that breed inconsistencies, conflicts, and holes. Suggests consolidating eg. The Commerce Dept., SBA, and several other agencies as a first step (proposed by Obama), and removing Congress from the equation.

Japan was the first to burst America's Free Trade honeymoon post WWII, treating customers, suppliers, and employees well, and refining its manufacturing skills to produce both better quality and lower costs. Japan, however, was dependent on the U.S. for its military defense, and probably too amenable to U.S. prodding - eg. follow accepted international monetary policy, leading to internal inflation. China, however, owes the U.S. nothing, has a much larger population (greater leverage over companies and investors, a seemingly infinite supply of low-cost labor, and strongly held values in which individuals are expected to sacrifice for the common good). It also has mastered the ability to use its firms as instruments of state and foreign policy, takes the long-term view, and does not manage to maximize profits. The CCP appoints at least the top three positions in each of its 50 largest SOES, and other state asset supervision entities control appointments at many others. (SOEs make up about half the economy.)

Our laissez-faire approach lacks national goals, forces firms to march to Wall Street's tune, allows businesses to be managed for the almost exclusive benefit of stockholders, and permits large numbers of jobs to be sent overseas - impoverishing the general public. Our approach also created three major recent problems - the Internet bubble, the real estate bubble, and then the credit crisis.

China's Three Gorges Dam provides 8X the power of Hoover Dam. It is targeting for non-fossil fuels to generate 15% of energy by 2020, and building one nuclear power plan/month.

China's Five Year Plan mandates that Chinese components replace foreign parts in all core infrastructure.' Chinese piracy costs an estimated $48 billion in U.S. 2009 sales (2.1 million jobs).

In 2000, most countries traded much more heavily with the U.S. than China. By 2010, India, Russia, Spain, Germany, Indonesia, Italy, and Japan had moved into China's trade dominance, leaving the U.S. with Turkey, Canada, Mexico, and the U.K. China is the world's largest exporter (> $1.2 trillion, then Germany at $1.2 trillion, and the U.S. at slightly less than $1 trillion).

U.S. annual government investment in infrastructure (2.4%), China (9%), Europe (5%). the national U.S. savings rate was 4.6% on 1/1/12, vs. 14.6% in 1975. Germany's is 16%, China's 38-53% (depending on which recent year).

The Heritage Foundation produces an 'Economic Freedom Index' comparing various nations. In the early 2000s, those with the least freedom grew the fastest, and by 2009 the relationship was negative. (Wealth/capital vs. the Freedom Index displays the expected pattern - for now.)

We need goals, depoliticizing the economic, long-term perspective, some free-market incentives, nationalism, benchmarking, experimentation, the ability to address problems quickly, and continuous improvement. The author also recommends we push China to comply with the agreements it has made, and establish a list of strategically important industries for ourselves - eg. telecommunications and heavy equipment, steel, IT, robotics, machine tools, etc., and return their production to the U.S.

Chinese Investor Lawsuits Could Cripple Canada

http://www.greenparty.ca/media-release/2012-10-24/chinese-investor-lawsuits-could-cripple-canada

OTTAWA – As the Harper Conservatives move steadily toward the probable November 2 ratification of the Canada-China Investment Treaty, an examination of Canada’s experience with similar investor rights under Chapter 11 of the North American Free Trade Agreement (NAFTA) should raise some red flags.
“Under NAFTA, we gave US and Mexican corporations the right to sue us if they felt our laws hurt their ‘expectation of profits’,” said Green Party Leader Elizabeth May, MP Saanich-Gulf Islands. “We’ve lost half of those suits and it has cost us in both arbitration battles and awards. Now Stephen Harper is about to give powerful Chinese State-Owned Enterprises similar rights.”
Since NAFTA came into effect in 1994, taxpayers have had to pay about $157 million to US corporations disagreeing with Canadian laws and regulations – and there are awards pending.
Canada is already the sixth most sued country under the investor-state dispute settlement regime, according to a recent UN Conference on Trade and Development report. At the same time, Canadian investors have sued other countries, usually the US, 16 times and lost every case – involving softwood lumber, cattle, gold mining, and more.
There is every reason to expect Chinese enterprises and investors to make use of their new right, especially in the resource sector.
China can make claims for damages if it believes an environmental or health measure is “arbitrary” or a "disguised trade barrier."
Unlike lawsuits under NAFTA and other treaties signed by Canada, the Chinese suits must be kept secret; the arbitration hearings and all documents, except the actual award, can be kept confidential at the discretion of the country being sued. We might not know if Canada has been ordered to change government decisions.
“If Chinese companies like CNOOC - the Chinese National Offshore Oil Corporation - make crucial inroads into Canada with the Nexen deal, for example, we will be even more vulnerable. Even the provinces, which will have no say in the process, might be asked to pay up,” said May.
“It is interesting that the Conservatives are pushing us into a secretive, potentially treacherous deal as countries like Australia, India, and South Africa are pulling away from investor-state provisions.”
The Canada-China Investment Treaty was tabled quietly in the House of Commons on September 26. The Conservatives do not plan any debate or vote. Once it is ratified, it will bind Canada for a minimum of 15 years and could apply for 31 years.
Suits under NAFTA have included:
1997 – Ethyl Corporation sued Canada for $250 million after it banned MMT, a neurotoxin gasoline additive. The Canadian government repealed the ban and settled for $13 million.
1998 – S.D. Meyers Inc., a US waste-disposal firm, challenged a ban on the export of PCB wastes and sued for $20 million. Canada paid $5 million, plus interest
2007 – Mobil Investments Canada Inc. & Murphy Oil Corporation claimed Canadian guidelines supporting local research and development were anti-NAFTA and sued Canada for $65 million The tribunal process continues.
2009 – After AbitibiBowater Inc. closed its last pulp and paper mill, Newfoundland enacted legislation for the return of certain land and assets. The company sued for $467.5 million. Canada paid $130 million to settle claim.

http://www.greenparty.ca/stop-the-sellout
http://leadnow.ca/canada-not-for-sale?t=hp

B.C. Legislature protest illegal Canada China Trade Deal

The Harper Signed Trade Agreement is Illegal.

The Canada-China Investment Treaty Cannot be Ratified Without Provinces’ Approval

OTTAWA – With only 9 days to go before the Harper Conservatives can legally ratify the Canada-China Investment Treaty, the Green Party of Canada wants to emphasize the fact that ratification without proper consultations with provincial governments is contrary to the Constitution.
That was the point of view of a Special Committee on the Multilateral Agreement on Investment created by the British Columbia Legislature in 1998. Its December 29th report stated that:

• “It must be emphasized that provincial governments are not simply another set of ‘stakeholders’ to be consulted by the federal government en route to treaty signature and implementation. Under the Canadian constitution, the federal government is incapable of unilaterally implementing international treaty obligations in areas that fall within provincial jurisdiction. Nor is it acceptable for the federal government to use its treaty-making powers to do an end run around the federal-provincial division of powers or in a way that diminishes Canadian federalism and democracy.
• “How is it that the federal government can expose provincial measures to binding international arbitration without the province's consent? [...] Who will pay if a provincial measure is found to violate the federal government's treaty obligations?”
• “In the committee's view, if the federal government fails to gain the express consent of the Legislative Assembly, then the Province must vigorously defend its authority on behalf of all British Columbians.”

“These are exactly the kind of issues the Green Party of Canada has been raising since the Conservatives quietly tabled the Treaty on September 26th. We are the only party in Ottawa opposed to the Treaty. Our online petition against ratification has been signed by 22,637 citizens,” said Elizabeth May, Green Party of Canada Leader and MP for Saanich-Gulf Islands.
“The Treaty pays lip service to provincial authority by stating that provincial and
territorial representatives were ‘updated’ on the progress of the negotiations with China and ‘did not express any opposition to the Agreement.’ What kind of Federal government is Harper’s? An ‘update’ does not meet the federal obligations under the Constitution,” added the Green Leader.
“The provinces should be very worried of having Harper signing this without their consent.  We have attempted to reach premiers across Canada. We now have 9 days to prevent Harper’s Conservatives’ attack on our democracy,” concluded May.

Request for Emergency Debate: The Canada-China Investment Treaty

Sign the petition:
http://leadnow.ca/canada-not-for-sale

Chinese companies can NOW sue BC for changing course on Northern Gateway

The most disturbing trade deal in a generation

http://www.leadnow.ca/canada-not-for-sale

In two weeks, Prime Minister Harper could pass the most secretive and sweeping trade deal of a generation.

This deal would pave the way for a massive natural resource buyout and allow foreign corporations to sue the Canadian government in secret tribunals, restricting Canadians from making democratic decisions about our economy, environment and energy.¹
Most Canadians have never heard of FIPA, the Canada-China Foreign Investment Protection Agreement, because Prime Minister Harper is trying to sneak it through without a single vote or debate in Parliament.^2,3
Canadians have a right to determine our future, but this agreement will undermine our democratic rights and lock us into an inescapable path of foreign-ownership and resource extraction until at least 2040.
The Canada-China FIPA is set for automatic approval on October 31st unless we get the word out now that the Harper Conservatives are trying bypass Parliament and sneak this deal by Canadians. That’s why we partnered with SumOfUs.org on this campaign – if enough of us raise our voices now, we can create a massive public outcry to stop this devastating deal in its tracks.

Send a message to Prime Minister Harper and your MP: Canada is not for sale, stop the Canada-China FIPA and the Nexen takeover. When 30,000 sign, we will deliver your messages to Ottawa.

Alongside this deal, the Harper government is trying to speed through the sale of Nexen, a major Canadian oil and gas company, to the Chinese National Offshore Oil Corporation (CNOOC), one of China’s massive state-owned oil companies.⁴ The $15 billion-dollar Nexen takeover will open the floodgates to a wave of foreign buyouts of Canada's natural resources.
If FIPA passes, a Chinese company can take over Canadian resources and then sue Canadian governments – provincial or federal – in secret, if the government does anything that threatens the company’s profits.
Any Canadian law or government decision – even ones that protect Canadian jobs, our environment, our economy and our families – could be fought in secret tribunals outside of our legal system. Arbitrators unaccountable to the Canadian public would have the power to award billions in damages to foreign corporations if we do anything that hurts corporate profits, like improve environmental standards or slow down the export of cheap, unprocessed resources.^1,5,6

Time is running out. We have two weeks before FIPA is set to pass into law, and the Nexen takeover could be approved at any time. Canadians, including many Conservative MPs, oppose the Nexen takeover, and Prime Minister Harper has just asked for a 30 day extension to regroup. We need a massive public outcry now.

 http://www.leadnow.ca/canada-not-for-sale

Additional Information

The ability for corporations to sue foreign governments in private courts, called “investor-state arbitration,” is a controversial practice built into many trade deals like NAFTA that has cost Canada millions and over-ruled democratic decisions, but none impose the level of secrecy in the Canada-China FIPA.
Incredibly, if BC tries to regulate or block Enbridge’s Northern Gateway Pipeline, Sinopec, another Chinese state-owned oil company with investments in Canada’s natural resource infrastructure, could sue the BC government for damages, and we may never even hear about it the case or its results.^5,6
Other countries like India, South Africa and Australia are moving away from this kind of trade deal. Last year Australia rejected investor-state arbitration due to concerns that it would “constrain the ability of Australian governments to make laws on social, environmental and economic matters”.^7,8

Why is Canada moving backwards?

Sources:

1. Canada-China Investment Deal Allows for Confidential Lawsuits Against Canada (Toronto Star)
   http://www.thestar.com/opinion/editorialopinion/article/1264290--canada-china-investment-deal-allows-for-confidential-lawsuits-against-canada
2. Tories quietly table Canada-China investment treaty (Globe and Mail)
   http://www.theglobeandmail.com/news/politics/tories-quietly-table-canada-china-investment-treaty/article4573635/
3. Battle over CNOOC’s proposed Nexen Takeover Heats Up In Ottawa (Financial Post)
   http://business.financialpost.com/2012/09/17/battle-over-cnoocs-proposed-nexen-takeover-heats-up-in-ottawa/
4. Ottawa extends it review of CNOOC’s nexen bid (The Globe and Mail)
   http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/ottawa-extends-its-review-of-cnoocs-nexen-bid/article4604093/
5. Chinese Companies Can Sue BC for Changing Course on Northern Gateway, says Policy Expert
   http://www.vancouverobserver.com/sustainability/chinese-companies-can-sue-bc-changing-course-northern-gateway-says-policy-expert
6. Chairman Harper and the Chinese Sell-Out (The Tyee)
   http://thetyee.ca/Opinion/2012/10/11/Chairman-Harper/print.html
7. Trading our way to more jobs and prosperity (Government of Australia)
   http://www.dfat.gov.au/publications/trade/trading-our-way-to-more-jobs-and-prosperity.html#investor-state
8. Multiple Countries Rejecting Investor State Dispute Settlement (Janet M Eaton, PhD)
   http://www.sierraclub.ca/en/main-page/multiple-countries-rejecting-investor-state-dispute-settlement

Stop the Sellout to China - What has Harper Done

What Has Harper Done?

 http://www.greenparty.ca/stop-the-sellout

On September 9^th, Prime Minister Stephen Harper signed an agreement with China, the Canada-China Foreign Investment Promotion and Protection Agreement. The agreement was kept from the Canadian public and Parliament until September 26th, 2012, when it was quietly made public by the Harper Conservatives.

Red Carpet for China

So what is the Canada-China investment agreement? Simply put, it is the most significant trade agreement signed by Canada since NAFTA. Only this time our “partner” is the communist government in Beijing, an authoritarian regime with an appalling record on human rights.
We at the Green Party of Canada believe there are many flaws in that agreement. And we think Canadians should know about them:

1. Open bar for Chinese state-owned enterprises

The Canada-China investment agreement means easier takeovers of Canadian assets, especially in the resource sector. In the context of the possible takeover of Nexen by the Chinese National Offshore Oil Company (CNOOC), it is crucial that we collectively pause to consider the wisdom of granting Chinese state-owned enterprises (SOEs) such an easy access to our natural resources.

2. Canadian laws vs. Chinese profits

The Canada-China investment agreement would allow Chinese companies (including state-owned enterprises) to sue federal or provincial governments over decisions that can limit their profits. Favorable rulings in favor of Chinese companies mean we collectively have to financially compensate the Chinese investor. It also means Canadian laws can be cancelled.

3. Back room deals

The Canada-China investment agreement would allow Chinese investors to sue Canada outside of Canadian courts. Special arbitrators would take the decisions. These arbitrators, unlike judges, do not have secure tenures or set salaries. Their decision cannot be subject to judicial review.

4. Right to be heard

Only the federal government is allowed to take part in the arbitration process. Provincial governments or Canadian companies, even if their interest are affected, do not gave the right to voice their concerns during the arbitration process.

5. China’s obsession for secrecy

The Canada-China investment agreement allows Chinese lawsuits to be kept secret. At any time, we will not know if we are being sued and who will decide the case. We will not know what our government is saying on our behalf. We will not know if Canada has been ordered to change government decisions. This is a complete U-turn for Canada who has always insisted on complete openness in investor-state arbitration, for example when signing the Canada-US-Mexico free trade deal.

What the Greens have done

The day after the Canada-China investment agreement was made public on September 26^th by the Conservatives, Green Party of Canada Leader Elizabeth May held a press conference to warn Canadians on the dangers of the agreement. The following day, Elizabeth wrote to the Speaker of the House of Commons demanding an emergency debate about the deal. Speaker Andrew Scheer, Conservative MP for for Regina-Qu'Appelle, turned down May’s request.
So far we are the only party raising the issue, demanding debate and alerting Canadians to the threat -- reduced sovereignty, reduced democracy, all for more Chinese ownership of Canada's resources.
We now call on Canadian citizens to also demand a democratic process for Canada’s ratification of FIPA while we still have time.

To take action, spread the word on social media and check the link at the top of this posting.

Rise of Communist China - Why "Its not fine"

Industrial Apartied - How to stop the New World Order - And How a Canada-China investment deal allows for confidential lawsuits against Canadian Taxpayers, chicom veto over Canadian law

 My Comment for today:
 
It is not any one event or story that gives us the big picture but the information in aggregate. We the people are not happy about what we are seeing. The other day I was listening to an interview by Paul Craig Roberts, former assistant secretary of the treasury, an insider at the highest level of government. He was speaking about how the economy was outsourced to the communist chinese. Shortly after I left the house and saw a police car painted over all black, no sirens. Inside was an officer wearing all black (unusual) black armor everything. His kit resembled what they wear when they disperse protests. I was followed to my destination.

I can remember when I was younger learning about the rise of fascism and asking how could the people be so calm almost accepting of their fate? Why did not more people leave ahead of time? Why did they not feel threatened by the big guys in black with guns? Now I understand a little bit better their lack of fear. When you get old, you are too old to be afraid. You see the world with different eyes.

We are living in a system I like to call "Industrial Apartheid". I wanted to coin this phase publicly so it would be granted some immunity from the memory hole.  

All regions have a right to industrial capacity. All people have a right to opportunity. When wealth is concentrated in one place, china the worlds factory, the rest of the worlds people are denied opportunity to use their talents to benefit humanity. A new economic system must be established based on localized production, democratic accountability, environmental sustainability, and human rights protection. 

We must resist the rise of Globalist Corporate Fascism. The New World Order we are living in amounts to Industrial Apartheid. I have been researching, and would like to elaborate more but I don't have time right now. About a week ago I came across an article that illuminated how the New World Order could be stopped. Ukraine trade demand shocks global partners.  
Notice the chosen photo is clearly propaganda. Basically the existing wto system that underpins the New World Order and created huge trade imbalances/ deficits has a weak spot. When countries raise tariffs they have to raise them equally on all trade partners. This presents difficulty because large nations with very diversified trade have an incentive not to retaliate for fear of affecting trade with other nations. A domino effect could have nations making strategic calculations on tariff policy that could have large and potential disruptive effects on trade flows. This potential chain reaction is a good thing as the current system of trade is unbalanced unsustainable and privately controlled by corporations and the communist party of china.

I have no time. I have to go now. Pray the black shirts don't get a hold of me.

Here's an article you might like:               

This is a credible source. There has been a lot of scholarly research published about international trade and investment law. It's out there for anyone to find, just look up "investor state provisions". I have spend countless hours studying these things.  They essentially are a way for the corrupt and powerful to get around democratic decision making, and while their at it steal taxpayers money.

The author of this article is Gus Van Harten, a professor at Osgoode Hall Law School where he specializes in international investment law. His research on investor-state arbitration is available at www.iiapp.org and http://ssrn.com/author=638855.

 

Canada-China investment deal allows for confidential lawsuits against Canada

 http://www.thestar.com/opinion/editorialopinion/article/1264290--canada-china-investment-deal-allows-for-confidential-lawsuits-against-canada

The Harper government is very keen on Chinese investment. On this there is little doubt, now that the Canada-China investment deal has been released.
The deal will tie the hands of Canadian governments, especially in the resource sector, once Chinese firms buy Canadian assets. It allows Chinese companies to sue Canada outside of Canadian courts. Remarkably, the lawsuits can proceed behind closed doors. This shift to secrecy reverses a long-standing policy of the Canadian government.
Under the deal, Chinese firms can sue in special tribunals to protect themselves from Canadian government decisions. Canadian companies can do the same against China. The technical name for this is “investor-state arbitration.” In Canada, it has been in operation since NAFTA.
In turn, any decision by any state entity in Canada — from federal or provincial legislation to a Supreme Court of Canada decision — can be challenged by a Chinese investor. The arbitrators, if they conclude that the decision violates flexible standards of investor protection, can issue orders and award damages against a country.
On the other hand, no one in Canada including the government will be able, under the deal, to sue a Chinese investor for breaking any laws. The claims are one-way. Also, only the federal government can participate in the arbitrations. Provincial governments, Canadian companies and other constituencies have no right of standing even if their interests are affected directly.
There is reason to doubt the independence of the arbitration process. Unlike judges, the arbitrators do not have secure tenure and set salaries. They depend for business on investors (to bring the claims) and on arbitration houses (to choose the arbitrators when the disputing parties disagree). Further, the arbitrators’ decisions on legal issues are not subject to judicial review.
So, it is prudent to ask, who are the arbitrators more likely to see as the major country, Canada or China?
Canada has a mixed record in investor-state arbitration. We have lost about half of the decided cases against the government, all by U.S. companies under NAFTA. Canada has had to pay about $160 million in compensation, with another award pending in a case involving research and development rules for the Hibernia and Terra Nova offshore projects.
Worse, Canadian investors have sued other countries, usually the U.S., 16 times and lost every case. We have lost on softwood lumber, cattle and gold mining. We have lost on gasoline additives, hemp and funeral homes. We have lost on a lot of things.
It is reasonable to expect that Chinese investors will use the Canada-China deal to pressure governments in Canada, especially in the resource sector. About one in five investor lawsuits involves a resource dispute. At least nine of the U.S. lawsuits against Canada under NAFTA have related to resources.
Most surprisingly, the Chinese lawsuits can be kept secret. This is in stark contrast to other treaties signed by Canada. Under NAFTA, since 2001, Canada and the U.S. have ensured that investor-state arbitrations were open.
Under the Canada-China deal, the arbitration hearings and all documents, except an actual award, can be kept confidential at the discretion of the country that is sued. This suggests that China objected to disclosure of Canadian lawsuits against it. More importantly for Canadians, the Harper government did not insist on disclosure when Canada is sued by the Chinese.
By implication, we shall have to assume in time that there are hidden Chinese lawsuits against Canada. We will not know why we have been sued or who is deciding the case. We will not know what the government is arguing on our behalf. And we will not know if Canada has been ordered to change government decisions.
Confidentiality is fine in commercial arbitration where the disputes do not affect the public. It is noxious in investor-state arbitration, which often involves matters of public importance. Incidentally, the secrecy has little to do with encouraging settlements; investors can and often do pursue confidential settlements before bringing a claim.
The turn to secrecy is an about-face for the government. Canada was until now a champion of openness in investor-state arbitration. As countries like Australia, India, and South Africa pull away from investor-state arbitration, we are embracing it in a virulent form.
The Canada-China deal undermines basic Canadian principles of public accountability and open courts. It raises dramatically the stakes of Chinese takeovers in the resource sector. If ratified, it will tie the hands of future elected governments for at least 31 years.