Date: 2024-12-21 Page is: DBtxt003.php txt00021704
FREE SPEECH
ANYTHING BUT FREE
Here’s how much the ‘Freedom Convoy’ has cost the U.S. and Canada
ANYTHING BUT FREE
Here’s how much the ‘Freedom Convoy’ has cost the U.S. and Canada
Burgess COMMENTARY
I am not at all sure that the protests in Ottawa and along the US/Canadian border are only about vaccination mandates but reflect a much deeper and widesrpead malaise about the quality of life in North America.
I was born in 1940 and grew up in the UK. I visited North America as a university student in the summers of 1960 and 1961. In 1960, after working in Canada for several weeks, I drove a used car ... a Cadillac DeVille ... across Canada from Montreal to Vancouver for a dealer. I returned to Ontario by Greyhound Bus and then shared the driving of another used car from Toronto to Florida. In other words, I got to see quite a lot of North America. As a young English boy I got a sense of the amazing wealth of working class Canadians and Americans compared to England and Europe. In 1961 I worked in Canada again for several weeks and then did a tour to all the steel industry locations in Canada and the United States and saw a lot more of working class wealth in these two countries. Some time later when I got my first job after college, I commented that these steel workers were earning more in one month than steel workers in the UK were earning in a year.
Fast forward and the wages of workers in North America have been going down for four decades since 1980 while wages in the rest of the world have been going up. In my view this is the root cause of the malaise of workers in North America and very understandable. Meanwhile the political class, investors and the business management class have all maintained their comfortable situations and done little if anything to mitigate the problem of inequality in earnings and wealth that has been emerging for a very long time.
The idea of 'freedom' has been an important part of life in North America and for a very long time it was enabled by an expanding 'frontier' and the occupation of [nearly] empty lands. This idea does not work so well in the increased population density of the modern era ... but the idea lives on. Over the road truckers are able to have a lifestyle that has some of the romance of this idea ... but mostly it is a pretty hard slog and not so much a romantic journey.
Others who do hard work and essential work in North America do not get paid very much now compared to what they were earning a generation ago. I argue that the reason for this has its roots in the oil crisis of 1973 when the OPEC oil cartel was established and international prices for crude oil were increased initially from #3.50 a barrel to $13.00 a barrel and quite quickly to more than $30.00 a barrel by 1979. This changed the cost and profit profile for every business in North America and set the stage for the business restructuring that subsequently changed everything.
The United States in particular had an industrial base and infrastructure that was very efficient when energy costs were low as they had been prior to OPEC. When OPEC got to raise energy prices, this US competitive advantage completely disappeared. During the 1970s it was very difficult for most of the US business community to earn profits. The exception to this, of course, was the oil industry that had a profit bonanza. Their cost to extract oil from the ground did not change, but the price they were able to charge the consumer went up.
President Nixon tried to control inflation during this time by imposing 'price controls' to stop business increasing prices. This was described in Washington as a success in combating inflation, but in reality it did nothing of the sort.
At the time, I was VP Manufacturing for Southern States Inc. a switchgear manufacturing company in Georgia which included a foundry to produce bronze castings. According to Washington the price of the raw bronze dropped from 50 cents a pound to 35 cents a pound because of the price controls. That should have been good, but the reality was that our supplier stopped shipping to us, but sold to the Europe where world prices still prevailed. I had to source the essential raw material in Europe at the world price which had not changed any, but then had to get the product from Europe to our factory in Georgia, USA ... using air freight! The delivered cost to our foundry was $1.50 a pound. So much for the Nixon talking point that the cost had gone down because of the price controls.For a long time I could not explain how it was that Saudi Arabia could orchestrate the creation of the OPEC oil cartel which did so much damage to the big and powerful industrial nations of the world. Eventually I realized that there were a lot of powerful interests that want oil prices to move up to higher levels.
First, all the big integrated oil companies had huge advantage when OPEC oil price increases were imposed.
Second, several countries had committed to developing offshore oilfields including the UK, the Netherlands and to a lesser extent the US in the Gulf of Mexico. The cost of oil from these oilfields was around $13.00 a barrel and could not be viable at the pre-OPEC price of $3.00 a barrel ... so these countries kept quiet as the OPEC disruption to global oil trade unfolded.
I think there was also a third thread, and that is to do with the agreement that the trade in oil would be conducted using the US dollar. This brought American Banks into the picture in a way that has been of great advantage to them since that time.
Peter Burgess
BY MEGAN LEONHARDT
February 14, 2022 12:56 PM EST
Traffic on the Ambassador Bridge, a critical North American trade route, reopened on Monday after a weeklong blockade by truckers protesting vaccine mandates ended. But not before the protests likely inflicted hundreds of millions in economic damage.
The so-called Freedom Convoy, which started in Ottawa more than two weeks ago and comprised roughly 8,000 participants at its height, created a blockade of key bridges and crossings between the U.S. and Canada, including the Ambassador Bridge—as well as daily demonstrations in the Canadian capital of Ottawa. The protests largely centered on objections to vaccine requirements for truckers crossing the U.S.-Canadian border, but came to include a protest against COVID regulations writ large.
The bridge is North America’s busiest trade link connecting Detroit to Windsor and a vital artery for the auto industry. About 25% of the trade between the U.S. and Canada crosses this particular bridge—about $360 million in cargo daily, according to Reuters. The seven-day blockage, therefore, had wide-ranging consequences.
The auto industry alone is facing losses as high as $988 million because of the blockades, given that there’s an estimated $141.1 million worth of vehicles and auto parts flowing in and out daily, according to 2021 data from IHS Markit, a research firm.
And even though the bridge has been cleared, it’s going to take several weeks for things to return to normal, Peter Nagle, an IHS Markit research analyst focused on the auto industry, told the New York Times. “It’s not like you can flip a switch and get back to where we were production-wise.” Several auto manufacturers, including Ford and Toyota, have said they’ve been impacted by the blockade.
Yet while the Ambassador Bridge has reopened, traffic still remains choked in Ottawa and border crossings in Emerson, Manitoba, and Coutts, Alberta, continue to face disruptions thanks to the protests.
Costs for increased daily policing in Canada’s capital have hit $800,000 a day, and Ottawa officials tell Global News that the city has spent an additional $1 million in city services as a result of the protests. (On average, the city spends about $620,000 a year on Canada Day safety and police expenses.) And those expenses will likely be ongoing until the protests disappear.
More than half of Canadians, 53%, oppose the protests, and 59% disapprove of the truckers’ tactics. That disapproval has trended higher as the protests have continued, according to polling from Innovative Research Group.
“Canada is [a] nation that believes in the right to freedom of speech and expression, but we are also bound by the rule of law,” Windsor Mayor Drew Dilkens said Sunday. “As Canadians, there is more that unites us than divides us, and we must all find the resolve to approach those who hold different views with tolerance and respect.”