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Archive for March, 2009

Ontario Budget Notes

Last week’s Ontario budget was quite momentous and challenging to digest. Budget analysis was initially overtaken by the Premier’s minimum-wage musings. The budget featured a combination of large expenditure increases and large revenue reductions. Overall, I think that it embodies the proposal from bank economists for temporary spending and permanent tax cuts. While it provides proportionally […]

The G-20 Meeting and Canadian vulnerability facing the global economic crisis

A missive from CCPA Executive Director Bruce Campbell: The G-20 the leaders’ meeting in London on April 2 will be a important test of whether the major nations are up to the challenge of confronting this recession and preventing it from becoming a depression. Will their collective response of monetary, fiscal and financial reform measures […]

Keynes and the 2009 Manitoba Budget

From Lynne Fernandez and Errol Black, of CCPA’s Manitoba office: Budget day always presents an opportunity to contemplate the state of society, and this year in particular has most of us pondering the current economic mess we are in. How did this crisis happen? How and when will we move back to more stable times? […]

Is the stimulus killing the P3 model?

While BC has not formally abandoned the P3 model, there is a notable absence of new P3 announcements at a time when billions of dollars are being channeled to infrastructure spending. If P3s really provided value for money and brought the benefits of private sector efficiency and innovation to the delivery of public-sector infrastructure, then […]

McGuinty Backpedals on $10 Minimum Wage

Yesterday’s Ontario budget lauded the announced minimum wage increase to $10.25 per hour on March 31, 2010. Today, media reports indicate that, “following a meeting with business leaders in Ottawa,” Ontario’s Premier is reconsidering this increase. The argument seems to be that, given hard economic times, we may not be able to afford a higher […]

Will the G-20 Leaders Save the World?

The global economy is in free fall, gripped by what the International Monetary Fund calls the“Great Recession.” In a crisis that is unfolding everywhere at once, global trade and production are slumping, unemployment is soaring, pension funds are evaporating, big global banks are still teetering on the edge of insolvency (if they are not already […]

The IMF is up to its old tricks

The IMF’s reputation took a real beating during the Asian financial crisis more than a decade ago. During a financial panic, it decided to impose contractionary monetary and fiscal policies on countries that came to it needing funds in the short-term. I won’t get into the details but Stiglitz’s Globalization and its Discontents and Krugman’s […]

The Public Sector Recession

Most regular folks and media pundits seem to assume that the public sector is recession-proof – hence all those nasty calls for wage freezes, cuts and pension rollbacks on the part of supposedly cosseted government workers from the CFIB and other right-wingers. In point of fact, it’s a myth. Since October, 2008 – when employment […]

EI Training and the Federal Budget

Here’s a perhaps rather obvious thought prompted by reading an outline of the next OECD Employment Outlook. In a period of high and likely prolonged unemployment, governments should increase their investment in training of the unemployed by an amount at least in line with the increase in unemployment. Budget 2009 fails that test. Spending on […]

“Real” Canadian Unemployment Rate Almost 12%.

Since October, 2008, the national unemployment rate has jumped sharply from 6.3% to 7.7% – driven entirely by job losses. The participation rate has fallen over the same period, from 67.8% to 67.4%. If this had not happened, the rise in the unemployment rate would have been even greater. As well, we have seen a […]

Will the US Dollar Collapse?

A thought-provoking piece from the Asia Times – apparently China is drawing on hidden forex reserves to purchase real assets such as stakes in resource companies – diversifying away from the US Treasury bubble in a non trivial way and perhaps setting the stage for a collapse of the US dollar. http://www.atimes.com/atimes/China_Business/KC18Cb01.html

Global Trade Unions Statement to G20

Trade Unions to G20:  Half Measures Will Not Fix Broken Global Economy Brussels, 23 March 2009 (ITUC OnLine): In a worldwide push for action by G20 governments to pull the global economy out of recession and chart a new course for job creation, financial regulation and global governance, trade unions across the world are today […]

Financialization and the Financial Crisis

Eric Pineault is the designated hitter on the topic of financialization but I thought I might make a small contribution to get the discussion rolling. I’ve been reading Galbraith’s The Predator State – see a review here — and it got me to thinking just how little our federal government — and governments elsewhere — […]

Warning: Credit Card Use May be Harmful (to Your Country’s Income Distribution)

Ah plastic. What’s not to love? Convenient? Check. Light in the pocket? Check. Monthly bill summaries? Check. Free short-term credit? Check (provided you pay your bills in full, on time). Benefits (free car rental insurance, points, cash back etc): Check AND… Take from the poor and give to the rich? err… wait a minute. Unfortunately, […]

Gloom and Doom, the IMF and the G20

I happened to listen to the end of week media pundits on CBC Newsworld and CBC Radio late Friday afternoon. Most – especially Don Martin and Joan Bryden on Newsworld – seemed perplexed as to why former Bank of Canada Governor David Dodge might have chosen to be distinctly more gloomy abour our economic prospects […]

Participatory Democracy in Action in Brazil

I came across an interesting piece in YES! Magazine about a city in Brazil that took an innovative approach to poverty reduction and practically ended hunger by adopting a food-as-a-right policy. Here is their story in a nutshell (although I recommend checking out the actual article). Belo Horizonte is the fourth largest city in Brazil […]

Statscan spins the recession

Here is the upbeat take on retail sales from Statistics Canada’s Daily: Retail sales rose 1.9% in January after decreasing 5.2% in December. Sales rose in five of the eight retail sectors, led by a 3.8% increase in the automotive sector. In volume terms, retail sales were up 1.8%. It goes on to report that […]

A Hopeful Sign, But Not Cause for Complacency

The increase in consumer prices between January and February suggests that the threat of deflation may be less imminent than it appeared during the previous five months of falling prices. Whereas three provinces actually posted negative inflation rates in January, all posted positive inflation rates in February. Today’s Bloomberg report begins by noting that this […]

Blogging the West

No, the West is not Alberta as everyone in Ontario seems to think (I’m from Toronto so I can say that). I mean BC, where an election is on in two months. You would not really know it walking around Vancouver, probably because the writ has not yet dropped, so we are in the calm […]

Canada’s Next Great Prime Minister, With No Interest in Electoral Politics

Once in a while, I come across a blog post that is so on-point I cannot add much more than a link to it. With CBC broadcasting this year’s edition of Canada’s Next Great Prime Minister tonight, I highly recommend this post on the contest’s boneheaded entry requirement. The rule is as follows: “It is […]

1% Small Business Tax: A Bad Idea Returns

Liberals are proposing to slash Nova Scotia’s corporate income tax rate for small business from 5% to 1%. We have seen this movie before. New Brunswick announced a 1% small business rate by 2007 only to instead restore a 5% rate that year. Nova Scotians might reasonably ask why their provincial neighbour abandoned the 1% […]

The Future of Capitalism

Some weekend reading: Amartya Sen, that other voice of sanity among recent Nobel laureates in economics, draws lines between the current economic crisis and the history of economic thought (with an emphasis on Smith, Keynes and Pigou), and what that all means for a “new capitalism”. Then, over at the Financial Times, a whole series […]

Quantitative Easing Redux

A couple of weeks back, I posted on the topic of “quantitative easing,” the policy of having the central bank aggressively purchase government (and possibly corporate) debt in the open market ostensibly to increase the money supply. I argued that at best, quantitative easing was a pricing operation that worked at the margin by increasing […]

The Financial Crisis: You Should Have Known Better

Ian Brown has a wonderful column in today’s Globe which rightfully suggests that maybe, just maybe, people should be a little upset about all the false promises of endless prosperity and perfect social harmony that were made in the leadup to the current economic and financial crisis.  Maybe, just maybe, the “system” must bear some […]

The wrong kind of stimulus

I am a big fan of stimulus packages for our ailing economy. But my pitch has been that we need to use the occasion to retrofit our economy to be on a more sustainable footing. So it matters a great deal on what we spend those stimulus dollars. If we launch projects that take us […]

US Economists and Unions

http://epi.3cdn.net/5986248785fbbcf2e6_ufm6iv2yk.pdf Prominent US economists  endorse positive role of unions and call for support of Employee Free Choice Act

Unemployment Hits Twelve-Year High

Preliminary reports on this morning’s Labour Force Survey emphasize that the unemployment rate reached its highest level since 2003. However, the situation is far worse in absolute terms. The number of officially unemployed Canadians rose by 106,000 in February, pushing the total over 1.4 million. In other words, the ranks of Canada’s unemployed swelled to […]

Spinning the IMF report on Canada

The IMF released the results of its Article IV consultation with Canada, giving us an outsider’s take on how well we are handling the global economic crisis. But it is hard to know what to take away if left to the mainstream press, when the business page headline in the Globe and Mail is “IMF […]

Following the money: the case of BC communities

It is one of those publications that few media outlets will report on, and even fewer British Columbians will read, but BC Stats just released the latest version of its Local Area Economic Dependencies, updated based on 2006 census data. This publication basically asks where the income in various BC communities comes from. In many […]

Fiscal Cost of PST Harmonization

Amid speculation that the Government of Ontario may harmonize its provincial sales tax with the GST, today’s Toronto Star reports, “The government has offered no analysis to determine how much of a benefit or a drain harmonization would be on the provincial treasury.” I have seen at least one estimate from outside government. Michael Smart […]