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Archive for October, 2008

Is BC’s Carbon Tax Fair?

The CCPA released today a new study by myself and Toby Sanger on the distribution of BC’s carbon tax and recycling regime. I’ve probably leaked most of the findings in various blog posts in recent months, but the full meal deal is now available for download here. Toby and I modeled the carbon tax by […]

Another BC economic plan

Last night NDP Opposition Leader Carole James delivered her own televised address to the province, following on the Premier’s underwhelming address last week. This was a much better effort from James, with the speech probably aimed square at tomorrow’s two by-elections in Vancouver. With the BC election is still seven months away, this tit-for-tat game […]

Relentless Self-Promotion

I debated Bill Watson from McGill on the economic crisis and the need for a “Bretton Woods II” for a half hour or so on the Sunday  Edition, on CBC Radio. I found him more than a tad complacent myself – markets will bottom out and it would be a mistake to re-regulate neo liberal […]

CLC Response – The FULL Version!

Here’s the full version of the summary posted earlier – a much longer analytical section, and more detail on our suggested policy response. http://canadianlabour.ca/en/clc-response-economic-crisis-full-version CLC Response to the Economic Crisis Global capitalism: on the edge of the abyss Dramatic recent events have thrown into sharp relief some chronic and long-standing problems of our global and […]

Saskatchewan’s Resource Royalties

Yesterday’s Leader-Post included the following report on my speech to the Saskatchewan Federation of Labour’s annual convention. My topic, “Is Saskatchewan getting a Fair Return on its Resources?,” may have been poorly timed given the recent crash in resource prices. However, it is important to put this crash in perspective. The current world oil price of […]

How Large is the Public Sector?

Murray Dobbin recently reminded me of and forwarded a very old article by David Robertson from the 1980s, published in the CUPE journal the Facts, which laid out some numbers on the scale and importance of the public sector vis a vis the whole economy. In search of comparable information, I explored StatsCan’s input- output […]

Inflation Targeting in a Deflationary World

Marc recently noted the Bank of Canada’s announcement that it was cutting interest rates to increase future inflation up to the 2% target. In the comments section, Stephen argued that there is nothing noteworthy about the Bank trying to achieve this target. Everyone else contended that the Bank’s new line deviates significantly from its previously […]

Now they tell us

From today’s release of the Fiscal Monitor, updating federal finances to August, or five months into the fiscal year: There was a budgetary deficit of $1.7 billion in August 2008, compared to a deficit of $0.1 billion in August 2007. …For the first five months of the 2008–09 fiscal year, the budgetary surplus is estimated at $1.2 billion, down $5.5 billion […]

BC’s underwhelming economic plan

BC Premier Gordon Campbell made a live address last night about the impact of the financial and economic crisis on the province, and what his government is going to do about it. I was keen to see what creative projects Campbell had in mind to take the edge of a recession that has already hit […]

CLC Response to the Economic Crisis

http://canadianlabour.ca/en/clc-response-economic-crisis-summary This call for government action was the result of deliberations at yesterday’s meeting of the CLC Executive Council, and reflects prior discussions among union economists. This is the summary. I’ll post the long version after it has bene translated and posted to the CLC web site. CLC Response to the Economic Crisis (SUMMARY) Global […]

Cutting interest rates to increase inflation

There is a new line of thinking over at the Bank of Canada: rather than raising interest rates to maintain the inflation target at 2%, the Bank is now stating that it might have to cut rates (beyond the 25 bp reduction today and 50 bp a couple weeks ago) to maintain the target. From […]

Bretton Woods 2.0

Digging through the rubble of the financial crisis, Jeffrey Sachs lays out his agenda for a new international financial architecture, aka Bretton Woods 2.0 (version 1.0 was the system laid out in 1944, composed of the International Monetary Fund, the World Bank and the ITO->GATT->WTO): First, we need to restructure global finance, based on an […]

Too Little, Too Late?

The Bank of Canada was right to reduce its target interest rate this morning, but it did not go far enough. The labour movement has been proposing significantly lower interest rates for at least a year. Even the C. D. Howe Institute’s conservative Monetary Policy Council, which was calling for an interest rate hike only […]

True Grist for the Populist Mills

They truly are a bunch of self-serving, greedy etc etc. … http://www.guardian.co.uk/business/2008/oct/17/executivesalaries-banking The Guardian October 17 2008 Top Wall Street bankers to receive $70bn pay deals Simon Bowers Financial workers at Wall Street’s top banks are to receive pay deals worth more than $70bn (£40.4bn), a substantial proportion of which is expected to be paid […]

The OECD on Iceland

Further to Toby’s excellent post on Iceland. Here are some extracts from OECD Country Reviews – courtesy of Roland Schneider of TUAC – which show gross disregard for the risks as they were building. Economic Survey of Iceland 2006 Published on 9 August 2006 Chapter 1: Policy challenges in sustaining improved economic performance Iceland’s growth […]

Fiscal Chic: Deficits are the New Black

Or would that be red? Anyway, our “left-leaning”, Keynesian thinking is quickly becoming the new centre. Fresh from endorsing PM Harper’s re-election, the Globe and Mail’s editorial page says: The scarred memories of $39-billion deficits are still fresh in the minds of many Canadians. We have been conditioned to demand that government stay out of […]

Time to break an election promise

Last night when I was watching the US presidential debate on Newsworld, the ticker told a one-line story that the Conference Board of Canada’s latest forecast for 2008 economic growth has been lowered to 0.8%. It was a redemption or sorts because back in February I testified before the House Finance Committee with Glen Hodgson […]

Milton and the Meltdown in Iceland

I was intrigued by what is happening in Iceland, so the following is a piece I’ve written on it.  It has some introductory macro-economics in it, which I think it is good to keep in perspective as we consider the frantic attempts being made to prevent an economic depression. The economic and financial collapse of 2008 […]

Harper’s Financial Advice

In Tuesday’s CBC interview, Harper told Canadians that “there are probably some great buying opportunities out there” and specifically pointed to “oil stocks.” Since then, the Toronto Stock Exchange declined by 8% and its Energy Index fell by 14%. S&P/TSX Composite Index Tuesday’s Close = 9,829.55 Friday’s Close = 9,065.16 S&P/TSX Capped Energy Index Tuesday’s […]

Politics during a meltdown

What irks me about the Harperites’ non-response to the economic crisis is their claim that they have responded by bringing in tax cuts, announced in the Economic and Fiscal Update almost a year ago, and perfectly timed to the occasion. There is an argument to be made for tax cuts as a fiscal stimulus, although […]

Calm Before the Storm?

Today’s apparently rosy Labour Force Survey should not distract policy-makers from serious problems in Canada’s labour market. So far in 2008, full-time employment is down and unemployment is up. Wanted: Full-Time Jobs Total employment rose by 107,000 in September, far exceeding the modest uptick that one might have expected from temporary hiring by Elections Canada. […]

Afghanistan by the Numbers

Today’s Parliamentary Budget Office (PBO) report provides the following estimates. Total Cost of the Afghanistan War (2001-02 to 2010-11): $18.1 billion Past Cost (2001-02 to 2007-08): $10.5 billion Future Cost (2008-09 to 2010-11): $7.7 billion These figures are incremental costs, “costs that would not have been incurred except for the operation. Alternatively put, these would […]

The Opposite of a Made-in-Canada Strategy

As Andrew suggests, the largest of Harper’s promises for manufacturing could aggravate the manufacturing crisis by widening Canada’s largest trade deficit. Eliminating the few remaining tariffs on machinery and equipment imported from outside of North America would encourage purchases of foreign-made machinery and equipment instead of Canadian-made machinery and equipment. From January through July 2008, […]

Deficits. Boo!

Deficits. There. I said it. Are you afraid? You shouldn’t be. If, as I suggested in my previous post, monetary policy is proving ineffective and if fiscal policy needs to be a big part of the solution, then we must consider what for many has become the unthinkable. We must revisit our fear of deficits, […]

Monetary Policy: Pushing on a String

The Bank of Canada today announced what appeared to be a dramatic cut (witness the splashy headlines) in the target for the overnight rate — a 50 basis point reduction. Bank of Canada to the rescue? Think again. The move was greeted with yawns from the banking community, which lowered mortgage rates by a mere […]

Lettre ouverte de la part d’économistes canadiens

Lettre ouverte de la part d’économistes canadiens à propos de la crise économique actuelle et la réponse du gouvernement qui s’impose La crise financière mondiale qui s’aggrave, la chute des prix des matières premières à l’échelle mondiale et le risque grandissant d’une récession mondiale dévoilent des faiblesses inquiétantes de l’économie canadienne. Le simple fait de […]

Open Letter from Canadian Economists

The Progressive Economics Forum’s open letter is now making the rounds. Signatories include four chairs of economics  departments, two former Presidents  of the Canadian Economics Association, a former federal  Secretary of State (Finance), and  a former Quebec Minister  of  Industry. Here’s the text and the 88 signatories: Open Letter from Canadian Economists on the Current […]

Let’s Import our Way to Manufacturing Recovery.

Today Stephen Harper announced that the Conservatives will support the hard hit manufacturing sector  by “abolishing tariffs on a wide range of imported machinery and equipment.” There’s no question that higher rates of real investment in new plant and equipment are essential to a manufacturing recovery.  That’s why manufacturing unions,  the CLC and all parties […]

Employment Insurance and Recession

Here’s a piece from the CLC election web site: http://canadianlabour.ca/en/employment-insurance-and-election-what-will-happen-if-there-a-recession EI is a critically important program for Canadian workers, especially in tough times like we face today. Laid-off workers obviously need adequate benefits to support themselves and their families while they search for a new job. Recessions mean that more workers lose their jobs, and […]

CLC Statement on the Economic Crisis

http://canadianlabour.ca/en/working-families-demand-a-fundamental-change Working Families Demand a Fundamental Change 2008-10-06 15:59 A Statement on the Economic Crisis by Canadian Labour Congress President Ken Georgetti OTTAWA – Canadian working families will bear the brunt of a deep economic crisis caused by self-serving and arrogant corporate bosses, aided and abetted by complacent, and do-nothing governments. Our jobs and our […]