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Archive for February, 2009

Simpson on the US Budget

Jeffrey Simpson has a good assessment in today’s Globe: Mr. Obama’s budget – hugely consequential for the United States and of importance to Canada, too – represents a U-turn from the disastrous policies of the Bush administration and of the Republican political revolution that began decades ago. Imagine a U.S. budget that simultaneously offends rich […]

The Crisis in Economics (and the Economic Crisis)

Far be it for me to suggest that the economics profession is or should be in crisis — introspection has never been the economist’s strong suit — so I won’t. But these far more qualified commentators do in a piece whose title says it all:  The Financial Crisis and the Systemic Failure of Academic Economics. […]

It’s the Demand-Side Stupid — Why Credit Ain’t Like Water

In the last few months, governments here and abroad have made every effort to “turn on the taps” of credit — in Canada, we have more than half a dozen such programs (and counting) under the banner of the EFF (Extraordinary Financing Framework), including (but not limited to): the IMPP (InsuranceMortgage Purchase Program); the CSCF […]

Next steps for monetary and fiscal policy

Just before Christmas, and lost between a trip to the mall and turkey with stuffing, David Laidler wrote a phenomenal piece on how we should be thinking strategically about a coordinated monetary and fiscal policy. I have reposted the key excerpt below because it should really be part of the mainstream discussion about how we […]

The Crisis and Macro-Economic Theory

I really enjoyed a recent piece by Tom Palley “After the Bust: The Outlook for Macroeconomics and Macroeconomic Policy.”   He argues with great assurance that only progressive Post Keynesian analytics can explain the crisis, and that we won’t get out of it with a bit of Keynesian tweaking of the neo liberal paradigm. http://www.levy.org/vdoc.aspx?docid=1116 “Change” […]

Macro-Economic Implications of the Pensions Crisis

The most obvious cause for concern regarding the meltdown of retirement savings vehicles is that current and future retirees will face major shortfalls in their retirement incomes. The scale of the problem reinforces the long-standing argument of progressive economists that we need to expand our system of public pensions moving forward, and reduce reliance on […]

Current Account: 2008 vs. 1999

Initial reports of this morning’s current account deficit emphasize that the fourth quarter of 2008 was the first such deficit since the second quarter of 1999. While correct, this historical comparison overlooks a crucial difference. Canada’s balance of investment income has always been negative. In the second quarter of 1999 and most previous quarters, Canada’s trade […]

Economics Word Search Puzzle!

OK this one is a bit nerdy, I admit it. I’ve been working on various popular education tools to go along with Economics for Everyone (my economics “textbook” for unionists and other activists), trying to make the material as accessible and entertaining as possible — and making it as easy as possible for local activists […]

Public Investment to the Rescue

The main message in Statistics Canada’s release of 2009 investment intentions is that modestly higher public investment will partly offset sharply lower private investment. The glass-half-full perspective is that things would look far worse without the increase in public investment. The glass-half-empty perspective is that this increase will not be nearly enough to fully offset […]

The Case Against Ticketmaster

Anti-trust lawyer David Balto, with the Center for American Progress, recently made the case against Ticketmaster’s proposed merger with LiveNation in testimony to the US Congress. The testimony also provides an excellent summary of Ticketmaster’s existing monopoly, some of which I excerpt below: Let’s be straightforward about one transparent fact: Ticketmaster is a monopolist and […]

Pear-Shaped Agreement Spotted on Canada’s East Coast

The deal, unveiled yesterday by the Premiers of Nova Scotia and New Brunswick, is not actually called PEAR, but PARE: Partnership Agreement on Regulation and the Economy. Like TILMA, it was signed pursuant to Article 1800 of the existing Agreement on Internal Trade to further “liberalize trade, investment and workforce mobility.” Unlike TILMA, it does […]

Are Tax-Free Savings Accounts Contagious?

Obama’s speech to Congress laid out an excellent agenda: substantial investments in renewable electricity, healthcare reform without delay, increased education spending, enforced limits on carbon emissions and the end of Bush tax cuts for Americans making more than $250,000. However, there was one bug, which I fear the President may have caught on his recent visit […]

Worker Ownership of Ford?

While the GM and Chrysler bailouts have prompted discussion of governments taking equity stakes in those companies, Business Week reports that Ford’s effort to restructure without government loans may make the United Auto Workers its largest shareholder. Henry Ford famously said, “Failure is simply the opportunity to begin again, this time more intelligently.” It seems […]

Temporary Migrant Workers

PEF member Salimah Valiani has written a report, released today by No One is Illegal, on the topic of temporary migrant workers in Canada, and a quiet but important shift in our immigration policies. The full report can be downloaded here and the abstract follows: This report elaborates the shift in immigration policy which began […]

Partisan claims about the BC economy

BC’s recession and election together mean things are going to get nasty in the political realm. Already we seeing plenty of sneering commentary from our esteemed cabinet ministers. Consider this jibe from Colin Hansen, the Minister of Finance, in his annual address to the brethren of Sigma Chi: “I want you to think about one […]

Thinking About Structural Deficits

I am a great admirer of Arthur Donner and Doug Peters  who have kept the flame of Keynesian economics alive in Canada for many years and regularly provide good progressive commentary. But I’m a bit out of sympathy with their column in today’s Toronto Star. http://www.thestar.com/comment/article/590916 Their major argument is that Canada now faces structural […]

The 18.2 Overture: An Evasive Tax Symphony

It has to be the single most successful lobbying effort in a long time. And no one will notice or care.  In Budget 2007, the Conservatives did something courageous and which tax experts had long called for : they proposed measures that would have denied firms a tax deduction on money borrowed in Canada, invested […]

Buy America Op-Ed Round-Up

Jim’s posting of his excellent Globe column prompts me to review Canadian labour op-eds, and responses to them, on the “Buy America” controversy. The CAW’s Ken Lewenza was first out of the gate, writing in The Financial Post (Feb. 3) that Canada should mirror Buy America with its own “Buy Canadian” policy. My National Post op-ed […]

Depression, Not Protectionism, Is What’s Killing Trade

The downturn in global trade is stunning — a sure sign that this is no garden-variety slowdown we are experiencing.  And in Canada’s case, the cyclical downturn in trade lies on top of a deeper structural change: our increased reliance on resource exports, which produced (via Dutch Disease mechanisms) a corresponding shift of output and […]

Don’t Take Away MY Defined Benefit Pension!

File this one under “painfully ironic”: The Ontario Securities Commission (public agency charged with monitoring the behaviour of the stock market industry) recently advertized for a Senior Economist.  Duties include collecting & interpreting data, monitoring developments in securities markets, helping Commission staff understand economic concepts, blah blah blah. The fun part is the compensation: competitive […]

Deflation Watch 2009

Consumer prices fell by 0.1% between December 2008 and January 2009, reducing the annual inflation rate to 1.1%. Prince Edward Island joined the other two maritime provinces in having the dubious distinction of a negative inflation rate. This decline mainly reflected falling gasoline prices. Lower fuel costs were partly offset by higher mortgage-interest costs due […]

Happy Birthday, Carbon Tax!

A year ago, in the 2008 BC Budget, a new tax was born. There was a hush over the House as its mother, the Finance Minister, prepared for delivery. The proud papa, the Premier, stood glowingly beside the new mom Carole and her baby tax, and basked in the glow of praise from climate scientists, […]

BC Budget 2009: Vanilla, No Sprinkles

Faced with a nasty recession at its doorstep, the BC budget is uninspiring and underwhelming in its ambition. Overall there is little that actively plans for a recession, preferring instead a steady-as-she-goes budget, perhaps aimed at cultivating the image of responsible economic managers in a time of crisis. There are no tax cuts or drastic […]

Steelworkers and the Auto Bailout

As has been widely reported, Ron Bloom from my union’s Pittsburgh headquarters will serve on President Obama’s Task Force on Autos. One might ask why a Steelworker is involved in crafting the automotive bailout. There are at least three reasons. First, during his previous career as a financier, Bloom developed significant personal expertise on the […]

Tales from the Mouth of the Fraser (BC edition)

In today’s Vancouver Sun, Neils Veldhuis and Milagros Palacios act as yang to my yin on the oped page. Their pre-budget oped seems strangely distant from the day-to-day reality of a recession that is unfolding in BC and elsewhere. Their response could have been written two or five years ago: the solution is to cut […]

Preparing for the BC Budget

I have an oped in today’s Vancouver Sun, juxtaposed against the Fraser Institute, unfortunately. I’d like to think mine is much more timely and appropriate given the current economic situation (I’ll get to theirs in a subsequent post). BC Needs an Action Plan to Fight a Nasty Recession On February 17 the BC government will […]

The Devil is in the Budget Implementation Act

Ah. For the good old days. When a Budget Implementation bill lived up to its, err, billing.  You know, stuff from the budget was in the bill.  Other stuff was dealt with in other bills where stuff could be properly debated. Nowadays, you never know what you’re going to get when you open your Bill […]

Laughing All the Way to the err…Bank

The Canadian Bankers’ Association must be happy.  They’ve somehow managed to convince pundits south of the border, and even a few here who really ought to know better, that they’ve somehow been able to weather the economic and financial storm with absolutely no help from the federal government. The most recent evidence for this position […]

Post-Partisan Depression

This afternoon’s news that the American stimulus bill passed without a single Republican vote in the US House of Representatives seems to validate Paul Krugman’s skepticism of bipartisanship. The Democratic effort to compromise with Republicans limited the amount of stimulus spending (as opposed to questionable tax cuts) in the package. If this constrained package proves insufficient, […]

Why Obama is Bound to Fail (?)

I found this piece by David Harvey to be an absolutely brilliant and compelling analysis of just how difficult it will be to get out of this crisis, especially now that the global economy is visibly in free fall before our eyes. His argument is that there is no adequate political base in the US […]