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Archive for June, 2009

When in Doubt, Blame Unions

The economy is in trouble, and millions of people around the world are suffering (in various ways and to various extremes), because of the failure of a deregulated profit-driven private-sector financial industry. I think that statement is largely unquestionable. You would think, logically, that this fact should put the free-market private sector on the defensive.  […]

The EI Premium Freeze – A Strange Form of “Stimulus”

Believe it or not, in 2011, the “new” EI Fund will begin life $10.5 Billion in the hole, setting the stage for a big job-destroying hike in premiums, even though there is a $57 Billion surplus in the “old” EI Account. In the 2009 Budget (p 106) , the federal government announced that it would […]

Rebuilding Our Economy: Public Investment and Green Jobs

(This covers some familiar ground, but I was asked to summarize a presentation I made to a Columbia Institute organized session for progressive locally elected officials last week and thought it might be of wider interest.) The world and Canada are in the deepest economic downturn since the 1930s as the financial crisis has spread […]

EI: National Improvements Needed

Today’s Employment Insurance (EI) figures confirm that fewer than half of unemployed Canadians received EI benefits in April. Although 18,600 more Canadians received benefits in April than in March, this was the smallest increase in six months. The relatively modest increase in EI beneficiaries corresponds to a relatively small increase in official unemployment during April, […]

Open Statement from Canadian Scholars on U.S. Employee Free Choice Act

Erin Weir had a highly useful post on this subject a few days ago.  Now here’s a chance to take some action: The Centre for Research on Work and Society at York is circulating the Open Statement below regarding the U.S. debate over the Employee Free Choice Act, and certain arguments that have been made […]

Flirting with Deflation

This morning’s Consumer Price Index data reveals that the national inflation rate fell to 0.1% in May. Four provinces – Alberta, New Brunswick, Nova Scotia, and Prince Edward Island – posted negative inflation rates. The supposed risk of continuing fiscal and monetary stimulus too long is that they could propel accelerating inflation. The Finance Minister […]

NDP Elected in Nova Scotia – What Now?

During the CEA meetings, I engaged in some provincial election talk with colleagues from Nova Scotia. I had just come off a brutal BC election campaign, in which the opposition stuck to a rather bland platform anchored in fiscal conservatism and axing the carbon tax. The NDP lost, and amid the subsequent soul-searching, leader Carole […]

Unionization and Unemployment: My Canadian Ears Are Burning

Three months ago, Anne Layne-Farrar intervened in the US debate about the Employee Free Choice Act (EFCA) with a widely-reported paper and Senate testimony. She used Canadian data to argue that the proposed legislation would eliminate 600,000 American jobs. As many critics have noted, Layne-Farrar works for a corporate consultancy and business funded this piece […]

Mommy, Where Do Deficits Come From?

Political debate and media reporting on today’s economic “Report to Canadians” have emphasized one of the first tables in the document, in which the government claims to have “committed” 80% of budgeted stimulus spending (page 14 of 230). Equally interesting, but perhaps less noticed, are the two “Fiscal Outlook” tables near the end of the […]

Canada at the Climate Crossroads

The second half of 2009 is shaping up to be one of the most important periods for international policy development. Ever. The fragile state of the economy, which continues to throw up worsening data with each passing period despite more optimistic talk in the media, will continue to be top of mind. But the collective […]

Davidson: Efficient Market Theory Vs. Keynes’s Liquidity Theory

Paul Davidson gave a great talk to the Progressive Economics Forum at the recent Canadian Economics Association meetings. Below is a teaser; the full talk is here. ALTERNATIVE EXPLANATIONS OF THE OPERATION OF A CAPITALIST ECONOMY: EFFICIENT MARKET THEORY VS. KEYNES’S LIQUIDITY THEORY by Paul Davidson, Editor, Journal of Post Keynesian Economics Politicians and talking […]

National Development Banks

The credit crisis, which sharply increased private borrowing costs but reduced government borrowing costs, highlights the potential advantage of having a public agency to finance economic development. The front page of today’s Regina Leader-Post features a report on my union’s letter (full text below) to the Government of Canada about Evraz using its Canadian facilities as collateral to […]

Deficit Caused by Tax Cuts

In my career of writing letters to my hometown newspaper, my favourite headline supplied by the Regina Leader-Post was “Deficit Caused by Tax Cuts,” for a letter arguing that Saskatchewan’s mild deficit a few years ago resulted from provincial tax cuts rather than from alleged overspending. Today’s inane press release from Finance Canada, lauding the […]

Ontario Unemployment Hits All-Time High

According to today’s Labour Force Survey, the national unemployment increase (83,800) was twice the employment decrease (41,800) in May. The explanation is that the labour force expanded by 42,000 as Canada’s population continued to grow. While some people are entering the labour market and getting jobs, many more are being laid off. As a result, […]

Making BC carbon neutral (the lazy way)

The biggest loophole in cap-and-trade systems, and greenhouse gas emission reductions more generally, is offsets. These are payments by those who produce GHG emissions for projects that reduce emissions somewhere else, so as to neutralize the originating emissions. Offsets have been criticized for not being easily validated – for example, by virtue of investments made […]

Stephen Gordon on EI

I recently had the pleasure of serving with Stephen Gordon on a panel about economics and blogging. Over at Worthwhile Canadian Initiative, he has been leading a one-man crusade against reducing the eligibility requirement for Employment Insurance (EI) benefits to 360 hours. His stated goal is to provide better protection for unemployed workers and counter-cyclical […]

Indebted Canadians

The conventional wisdom seems to be that the  financial situation of Canadian  households is generally sound and certainly much better than that of our profligate and heavily indebted American neighbours.  The Bank of Canada argued in its end of 2008 Financial System Review that  “(O)verall, despite a modest deterioration, the financial position of the Canadian […]

The Manufacturing Crisis in Quebec

One question that has long been of concern to me – and for which relevant data are very limited – is the permanency of recent manufacturing job losses. We know that tesn of thousands of jobs have been lost,  but not how many job losses are due to the permanent closure of facilities. A paper […]

The Financial Crisis

Here’s an extremely well-written and cogent commentary on the state of the banking system and the grim consequences  for the rest of us, especially in the UK, by novelist John Lanchester, from the London Review of Books. He’s at work on a book on the same topic http://www.lrb.co.uk/v31/n10/lanc01_.html

Buy North American

Canadian newspapers have recently been flooded with negative stories about Buy America, largely focussed on a single scandalous incident at a Marine base in California. The potential damage to Canada’s economy has been vastly overstated. To the extent that Buy America shifts US government contracts from offshore suppliers to American manufacturers that use Canadian components, Canada […]

Bank Mergers – The Left was Right

My personal theory as to why the Canadian banking system survived the great global financial crisis relatively unscathed is that calls by the big Canadian banks in the late 1990s to allow mergers were successfully resisted. Had the big banks been allowed to merge to pursue their global ambitions, they would have ramped up their […]

Canadian Recession: It’s Official

This morning, Statistics Canada revealed the country’s worst-kept secret: the economy contracted for a second consecutive quarter in the first three months of 2009. Adjusted for inflation, Gross Domestic Product dropped by 1.4%. If this trend continued (and compounded) for a year, the Canadian economy would be 5.4% smaller. On the other hand, this decline […]