The Progressive Economics Forum

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 — has [...]

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, credit cards — especially those feature-laden cards that [...]

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 demand [...]

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 [...]

It has come to my attention that some economists claim that our sovereign federal government is more or less powerless to kickstart the economy because of our great dependence on the United States and therefore should do next to nothing:
“Mr. Orr and other economists urged Ottawa to ignore pleas to boost stimulus spending further - [...]

There has been much talk, of late, about the ineffectiveness of conventional monetary policy — i.e., lowering the target for the overnight interest rate to incite borrowing and hence economic expansion — and the need for monetary authorities to consider something more dramatic, like so-called “quantitative  easing” — the active buying of government debt and [...]

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.
Read’em and [...]

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 (Canadian Secured [...]

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 [...]

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 C-10 [...]

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 is [...]

PEF people are not the only ones who correctly anticipated some of our recent economic and fiscal events.  Jamie Galbraith also saw a lot of this coming in his book The Predator State. With no further ado, I’m posting an enthusiastic review of the book by fellow traveler and Sorbonne PhD economics graduate Henry Sader:

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, that word — that state [...]

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 [...]

It’s not often that I get my hopes up about a potential volte-face in the way we talk and think about economics at the policy and political level but this is by far the best news I’ve heard in a long long time. It seems that our very own Jamie Galbraith, scion of John Kenneth [...]

I have been critical of the Globe’s business reporting practices in the past (especially its tendency to quote Bank economists as “objective” observers of economic events) but on Saturday, it ran one of the best business pieces I’ve read in a long time.
The article, titled “Who is responsible for the global food crisis?” is a [...]

Ever wonder what the Bank of Canada might do in the event of staflation (high/rising inflation & high /rising unemployment)? Wonder no more. In an interview with LaPresse, our new Governor Mark Carney states, in no uncertain terms, that the Bank’s objective would remain the same as it has been since the early [...]

Well. Finally. Some clarity. Sort of. Earlier this month, Bank of Canada governor Mark Carney made appearances before the House of Commons Finance Committee and the Senate Banking, Trade and Commerce committee to discuss the Bank’s latest monetary policy report . Transcripts are now available and with a little reading-between-the-lines, they tell us a [...]

What is going on out in Canada’s wild and woolly financial system? First, the Bank of Canada convinces the Department of Finance and the Conservatives that it “needs” expanded powers to purchase a broader range of securities (see my earlier post for why their arguments are not very convincing). And then, earlier [...]

Over the years, federal budget legislation has acquired the feel of U.S. omnibus bills (the Farm Bill is probably the quintessential example). To some extent, this is to be expected. Ever since the “disastrous” Trudeau era, the imperial Department of Finance has not-so-quietly re-asserted its domain over the federal bureaucracy.
One manifestation of Finance’s power [...]

And so, as we recover from Tuesday’s budget and recoil at the spectacle that is the Cadman affair, let us all pause and mark this moment for it may be the last of an era, one we may come to know as the “pre-PBO” era, an era where, in the context of contrived “budgetary scarcity,” [...]

If anyone had any doubt…

I want to piggy-back very briefly on Marc’s post from Tuesday (and update yesterday) which suggested that the proposed Tax-Free Savings Account won’t “promote investment” like the government says it will (see page 76 of Budget). The empirical literature I’ve seen certainly supports his argument — most corporate investment is financed from retained earnings, which [...]

This post was inspired by my wife, a non-economist (thankfully) who asked me the other day for my opinion on the endless equalization debate. My answer was simple: follow the politics.
As every insider knows, the excommunication of Bill Casey, an MP from Nova Scotia, is only the tip of the iceberg of discontent [...]

I’m not a big fan of business journalism. For the most part, it’s a lazy, sycophantic, uninspired, biased, occasionally self-interested (in a conflict-of-interest sense) and worse yet, boring business. I should know, I was once part of the fold.
In my experience, at least half of financial journalists are in it for the food [...]

Over the last little while, some of my compadres here at Relentlessly Progressive Economics have intuited and sometimes even insisted that while Stéphane Dion’s socially liberal bona fides are not in question, his economic policy proposals place him well to the right of centre.
Well, now we have proof from none other than Mr. Dion himself. [...]

While we’re all breathlessly awaiting the federal government’s long-promised revisions to the Copyright Act, interested parties may want to check out Bill C-47, the federal government’s proposed legislation to grant extra special intellectual property right protection for the Olympic movement and its related symbols.  For a summary of the legislation, check out the Library of [...]

Arun DuBois signing in after a long absence. I’m breaking radio silence because (a) I suddenly have a bit more free time (how do the rest of you do it? You folks are machines!); and (b) my righteous indignation has been stoked to full throttle this week after reading one too many Globe and Mail [...]

This is good news and good timing. With Steve Jobs on side, maybe the folks at Heritage/Industry will reconsider their quaint attachment to rigid intellectual property rights measures when they set about drafting amendments to the copyright act. Dare to dream…

The recent flurry of stories about Canada’s copyright laxity (see below) suggests that the “rights holder” community is softening up the Canadian public for a strong dose of copyright medicine. Want to see first-run movies at your local theatre just like everyone else in North America? Better support some tough new copyright (and criminal code) [...]