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Archive for December, 2006

So what’s your great idea, Einstein?

When it comes to intellectual giants, it is hard to top Einstein. From this article in the Monthly Review in 1949, it looks like he would have made a pretty good economist had he not bothered with all of that “how the universe works” stuff. We know he’d be good at the math. Many economists […]

Saddam Hussein

There is not much positive to write about either Saddam Hussein or the American invasion of Iraq. In his October 11 column, Andrew Coyne lamented North Korea’s nuclear test, but suggested that it would have been even worse had Saddam Hussein still been in power. On October 13, the National Post ran the following letter […]

Dion-omics Redux

I would like to initiate some discussion about Stephane Dion. I do not see much reason for optimism about his economic policies, but am interested in reading alternative views. After observing that many progressive Canadians seem supportive of Dion, Murray Dobbin convincingly argues that a Liberal majority government would not be more progressive than the […]

Unpaid Taxes

One wonders how much the Government of Canada could recover by offering an amnesty to tax evaders who come forward and pay up, followed by a serious effort to identify and prosecute those who do not. The Times December 30, 2006 Mystery billionaire pays $200m in back tax – and keeps a state afloat Chris […]

Inequality DOES Matter

 http://www.guardian.co.uk/commentisfree/story/0,,1979785,00.html A return to the politics of envy could serve us well As inequality grows, the country becomes nastier. We should be seriously unrelaxed about the existence of the filthy rich Peter Wilby Friday December 29, 2006 The Guardian I hope the employees of Goldman Sachs and other City firms who netted a reported £9bn […]

Stiglitz on Galbraith and Friedman

A nice summary of the legacies of Galbraith and Friedman, with a strong plug for Galbraith and what the economics profession lacks due to his death. I should note that the Progressive Economics Forum will be creating a John Kenneth Galbraith Prize at this year’s Canadian Economics Association meetings. Jamie Galbraith has given his backing […]

Recession watch: 2007

Compare and contrast. First, the “soft landing” view, from Carlos Leitao, Chief Economist of The Laurentian Bank, as quoted in the Globe and Mail: [T]he Canadian economy is in the midst of ”a significant slowdown that we still think should be relatively short-lived. Nevertheless, the downside risks are important and far outweigh upside risks.” [T]he […]

Atlantica: Dumbest idea of 2006

Atlantica is the brain child of Brian Lee Crowley of the Atlantic Institute for Market Studies, and current senior advisor in the federal Department of Finance. I had thought that this was a case for some sort of deep integration between the Canadian Atlantic provinces and the US northeastern states – a case that would […]

Morgan Stanley (Stephen Roach) Thinks Labour and Left are in for a Good Year

http://www.morganstanley.com/views/gef/index.html#anchor4105 Global: From Globalization to Localization Stephen Roach | New York On one level, there seems to be no stopping the powerful forces of globalization.  Not only has the world just completed four years of the strongest global growth since the early 1970s, but in 2006, cross-border trade as a share of world GDP pierced […]

Are Wages the Key to Productivity Perfomance?

I have posted below a response by a senior Government of Caanda official to my earlier post on why the Canadian econmy is operating below capacity – the core subtance of which is to suggest that wages are too low to stimulate needed productvity gains. A somewhat usuual, out of mainstream response… > This was […]

BC is the cruise industry’s toilet

The Vancouver Sun story below should be filed under “we told you so”. The CCPA released a few papers on this very issue by Ross Klein, a Newfoundland-based cruise ship expert. The most recent was sixteen months ago, and focussed specifically on the BC industry. Here is what it said: BC also risks becoming the […]

Thailand’s attempt at capital controls

Larry Elliott, writing in The Guardian’s Comment is Free area, on Thailand’s capital controls and its subsequent capitulation: A financial U-turn Thailand’s use of capital controls was intended to penalise short-term investors – but the market reaction was swift and brutal. December 20, 2006 07:04 PM It’s not often I feel sorry for military regimes, […]

Mortgage excesses in the US

This is scary: The Concerns of Comptroller of the Currency About the Excesses in the Mortgage Market Nouriel Roubini | Dec 18, 2006 A colleague in the financial sector pointed to my attention a speech that the Comptroller of the Currency – John Duggan – has recently given where he expressed some serious concerns about […]

Another Katrina moment

Former Vancouver city councillor Gordon Price coins a new term, the “Katrina moment”, of which Vancouver has had a few this Fall. The latest was a fiece windstorm that passed through early Friday morning. Almost everyone I’ve talked to was awakened around 3:30 am by the howling wind, which approached but just fell short of […]

Neil Reynolds on Inequality

Another over the top tirade in today’s Globe from Neil Reynolds for whom “equality is the stuff of gulags and guillotines.” (Dion Gets it Wrong on Real Freedom. Globe and Mail. December 15.)   Mr Reynolds appears to be entirely unfamiliar with the best comparative empirical resarch on the topic, generally available from from the Luxemburg Income Survey […]

Economic effects of unions

Given some recent discourse on unions in our comments area, I decided to reach back to a fairly comprehensive literature survey on the empirical evidence about unions. The report comes not from the CCPA, CAW or CLC, nor does it come from the ILO, but from the World Bank. It is a rather weighty tome, […]

A Surge in Wealth Inequality

There was a fair amount of media coverage of the new data  on assets and debt from the 2005 Survey of Financial Security released by Stats Can last week (Daily, December 7); less so of the very useful companion research paper on wealth inequality by StatsCan researchers Morissette and Zhang published in the latest issue […]

Manufacturing Shipments Fall

An article in Statistics Canada’s Daily notes that the value of Canadian factory shipments hit a two-year low in October. Because manufacturing includes petroleum products, this development largely resulted from the recent oil-price drop. The inclusion of resource-processing industries means that the value of “manufacturing” shipments partly reflects commodity prices. In my view, the more […]

Signs of Life in Canada’s GAI Movement

It is the policy that dare not speak its name. For the better part of the last 20 years, the idea of a guaranteed annual income (GAI), a government funded unconditional annual income floor below which no family or individual can fall, has been met with ridicule, dismissal, silence and, more often than not, legislation […]

Krugman: the great wealth transfer

A recommended article by Paul Krugman on US inequality trends appears in the Rolling Stone Review of Economics, The Great Wealth Transfer.

Who Will Have a Good Holiday?

As we head into the Christmas holidays and many of us look forward to spending some time away from work with our families, it’s worth noting that there is great inequality among Canadian workers in terms of access to paid vacation leave, and big gaps compared to other industrial countries. The statutory minimum in Canada varies […]

Subsidies in the oil patch

Eric Reguly on the Accelerated Capital Cost Allowance and Big Oil, from today’s Globe: Oil sands may be federal Tories’ Achilles heel … For the opposition parties, the beauty of the oil sands is that you can point to them. The visuals are appropriately disturbing. You can see the gaping holes in the earth, you […]

Scientists call for action on toxic chemicals

A letter to the Prime Minister from Scientists For A Healthy Environment, which doubles as an effective critique of the Canadian Environmental Protection Act: Dear Prime Minister, We are writing to encourage your Government to make significant improvements to Canada ‘s overarching pollution law, the Canadian Environmental Protection Act (CEPA). Canada has a growing pollution […]

Time to Nationalize Ticketmaster

I balked at purchasing some tickets this weekend because of the rapacious service charges of Ticketmaster. The cost of the tickets was already pretty high, at $38.50, but that just seems to be the going rate these days. Generally, I do not begrudge the escalating cost of live performances because artists make most of their […]

Is the Canadian Labour Market Really Operating at Capacity?

(This note was prepared for a meeting of trade union economists with Paul Jenkins, Deputy Governor of the Bank of Canada, to be held on Monday, December 11, 2006.) Introduction The Bank of Canada believes that the Canadian economy is currently operating “just above” capacity, justifying this week’s decision to leave interest rates unchanged despite […]

Back-of-Envelope Math on TILMA

It seems to me that, compared to an international free-trade agreement, TILMA provides none of the potential benefits (i.e. tariff reductions) and all of the costs (i.e. regulations harmonized to the lowest common denominator and businesses suing governments). As Marc noted below, the Government of BC claims that TILMA could add $4.8 billion to provincial […]

TILMA’s fuzzy math

BC and Alberta signed a new agreement earlier this year to reduce interprovincial barriers to trade. The Trade, Investment and Labour Mobility Agreement (TILMA) is due to go into effect in April 2007. Apparently Saskatchewan and Ontario are now considering signing on as well. While it is widely believed in business circles that there exist […]

Regulating toxic chemicals

“Canada’s New Government improves protection against hazardous chemicals” says the press release. This item fits in the “ounce of prevention” file, but is also another one for the “opportunistic Harper government” file.On prevention, Canada has been slowly getting its act together with regard to the growing evidence that thousands of untested and unregulated chemicals in […]

Fighting crime through social services

Another piece for the “ounce of prevention” file. Poverty, homelessness and crime in BC have gotten bad enough that business leaders are starting to call for action. Thus far, the call has been more cosmetic, as in “get these bums out of my doorway” and “panhandlers are bad for tourism”, but it is a start, […]

The “net debt” sleight-of-hand

The Vancouver Sun’s Harvey Enchin comments on Finance Minister Jim Flaherty’s net debt elimination plan, pointing out some nuances in changed accounting practice around the concept of “net debt”:   When Finance Minister Jim Flaherty vowed to wipe out Canada’s net debt by 2021, many people heard something else. They thought he had made a […]