Blog 10 May 11, 2014
Farming is at the heart of our economic problems… and our economic solutions
– Part 2 This is the story
To repeat: The current conundrum is
that 50% of the people in Nova Scotia work for the government. This does not create
wealth. Of the remaining 50%, 25% cannot
work because they are either too young or too old to create wealth. Of the remaining 25%, supposing 5% cannot
work for whatever reason, this leaves 20% to create the wealth to run Nova
Scotia. This 20% is diminishing. Parity and agriculture can create wealth. Thus
this is the story of Parity.
At the beginning of WWII, Wilken, who
we mentioned before, went to congress.
He warned them that the USA would go bankrupt and loose the war if they
did not have a means of paying for the war. Few believed him, however, he did
convince the committee on banking and currency that agriculture provided 70% of
the new wealth into the economy, and that agriculture could finance the cost of
war. So they drew up what was called the
Steagall Amendment (see some links below) which guaranteed farmers PARITY. To insure that congress would
not veto the amendment, they attached it to the National Defense Act. People
were led to believe that war brought prosperity when in reality it has always
been agriculture, and the other three basic resource industries, that foster
economic prosperity. Historically, the farmers at the beginning of the 1900s
were the bankers of the local area.
What is happening now?
At the end of the war, as industry
the world over converted from military to domestic needs, everyone prospered.
People paid off their debts, very few were borrowing, and at that time the
banks were only lending 37.5% for each dollar deposited. (Now the banks only
keep a small amount (in more recently years I believe the rule has been 5-7
dollars for each $100.00; this means the banks have no money in the bank and
nothing in reserve.) That is when
bankers said, “Look we have to take the fat away from the people. There is too much prosperity. We have got to force people to borrow more
money from the bank.” And they have done just that.
Banks planned, thus to short change
the monetary system. If fair prices to producers of new wealth brought
prosperity to the nation, than the opposite will force a down turn of the
economy. Since agriculture provides 70%
of the new wealth into the economy each year, that became the target industry
to undermine. In 1953, the bank lobby scuttled
the Steagall Amendment. Government
switched to a sliding scale where by farmers would only get 90% of Parity. The
next year they would only get 90% of 90% and down and down each year. Farmers
were put in a position to borrow from the banks to cover lost income.
Pretty soon it backed up the entire system until every segment of society was
borrowing money. When the plot to scuttle agriculture was set in motion in
1953, that created the current situation now known to be the most fantastic debt infested
economic situation the world has ever known. We have a global
condition of government debt, business debt and people debt all because
farmers were denied a fair price for their produce, and of course now, we have
very few farmers left.
If you are still puzzled about
farming parity, and its relationship to the economy, if you still wonder what
this has to do with employment and debt,
just take a look at one piece of equipment the farmer buys and how it affects
others: tractors.
In the last 30 years we have lost
300,000 Canadian farmers. If they had
remained in farming, each of them would most likely have bought a tractor about
every 10 years. That means that there were 900,000 tractors that were never
sold. That represents millions of
dollars that no farm equipment dealers earned one penny of profit on, the
servicemen would not had them to service, no railway men or truckers moved
them, no working man in any factory received a salary for building them. It represents 3,600,000 tractor tires that no
rubber company was able to provide. It
represents 900,000 tractors’ worth of steel that no steel company received a
penny for producing. It represents tons and tons of iron ore that no miners
ever mined. Then, there were all the
office workers, advertisers, sales people and so on who lost jobs. All of this represents business, work, wages,
profit and earned income that was gone, gone because farmers did not receive a
fair price for their product. And of course now, we have to look at pension
plans and realize that future generations may have no pensions at all.
Here is a different example of how
far far away from parity we have deteriorated. In 1973, 9300 bushels of corn
would buy a large combine. In 1983, it
took a farmer 25,000 bushels of corn to buy the same sized combined. If Parity
had remained in place, the farmer would still be able to buy a combine for the
equivalent of 9300 bushels. Do a little calculating and you will be amazed at
how this works out in bags of potatoes, litres of milk, pound of pork, etc. Society
and government have lost touch with realities of where new wealth comes from, how vital it is, and how it will
restore us back to national prosperity.
However, new wealth alone is not the answer. Parity prices on new wealth
is the answer. (Parity price = fair
price for product.) Agriculture is the
backbone of the economy and farmers are the backbone of agriculture. No longer can farmers go to the market place
with nothing more than hope that they will be paid a fair price. Farmers are the only people who have not
joined the human race in putting the price on the product and a price on their
labor. What should be the price of their labor? (will be addressed later in a
blog
Any mathematician or economist studying
the workings of any economy will discover that whenever farm income goes down,
unemployment goes up. For every 1%
increase in interest borrowing rate 10,000 people become unemployed. We can no
longer as a nation, or province, or as individuals borrow ourselves out of
debt, you cannot borrow yourself out of debt. Parity will help create a better
balanced world and a peaceful world. Do we want this? Or do we do nothing and
let our world collapse. PARITY – THE KEY
TO NATIONAL ECONOMIC PROSPERITY.
Next blog – questions and answers
about Parity.
Link re Steagall Amendment:
