http://www.progressive-economics.ca PEF home page and weblog Fri, 10 Sep 2010 18:07:55 +0000 http://backend.userland.com/rss092 en This is a true story. I made porridge for my children this morning, as I usually do.   When my son first tried it, it was too hot.  When I finally got around to eating, it after making the kid's lunches, it was too cold.  But when my daughter tried it, it ... http://www.progressive-economics.ca/2010/09/10/fairy-tales-and-labour-force-surveys/ Total employment reportedly increased by 36,000 in August. This increase was entirely driven by 68,400 more jobs in educational services, which simply offset a decline of 65,300 in July. In other words, the educators that Statistics Canada counted as being “unemployed” in midsummer are now “employed.” So, today’s Labour Force Survey ... http://www.progressive-economics.ca/2010/09/10/jobs-report-worse-than-it-appears/ For reasons that escape me, the Globe ran a headline front page story today on what all fiscal policy and Employment Insurance wonks have known to be true for some time. Under current legislation, and as announced in the 2009 Budget, the EI premium rate set by a supposedly autonomous but ... http://www.progressive-economics.ca/2010/09/09/ei-premiums-come-full-circle/ ... The Labour Day issue of the Vancouver Courier. It even had a story I was interested in, a lead article on local food, and another on the sustainability of fisheries. Good on small-scale independent journalism, I thought, until the moment I took off its rubber band to reveal an ... http://www.progressive-economics.ca/2010/09/08/with-a-thud-on-my-door-it-arrived/ Linda McQuaig puts the heat on Ontario’s public-sector compensation freeze in today’s Toronto Star. Her excellent column begins by noting that the federal government has fended off proposed financial-sector taxes on the grounds that Canadian banks did not cause the global financial crisis. But Canadian public-sector workers, who are even less ... http://www.progressive-economics.ca/2010/09/07/linda-mcquaig-thaws-public-sector-pay/ Here is a good piece by Tom Palley in the FT Economists Forum on where the Obama Administration should be moving in terms of economic (though I am not holding my breath until the economic team is dumped) http://blogs.ft.com/economistsforum/2010/09/plan-b-for-obama-on-the-economy/#more-11616 http://www.progressive-economics.ca/2010/09/07/plan-b-for-obama/ One thing I find a bit annoying over at Statscan is that detailed tables related to a release sometimes appear on the web site a few days after headline numbers are released in the Daily. I was phoned by a couple of reporters seeking comment following the release of wage data ... http://www.progressive-economics.ca/2010/09/05/whats-happening-to-wages/ This summer, the Ontario government has been attempting to implement its proposed public-sector compensation freeze. The provincial Finance Minister has essentially promised that he can convince organized labour to comply. But as recent news reports confirm, unions have not been volunteering for a pay freeze, especially since the government apparently ... http://www.progressive-economics.ca/2010/09/04/ontario-public-sector-compensation-freeze/ Jim and I responded somewhat differently to Tuesday’s GDP release. Jim’s Globe and Mail column suggested that it was especially bad: “We’re clearly heading for stagnation at best, and quite possibly another ‘double dip’ downturn.” I perceived a ray or two of hope and told The Toronto Star: “I’m not ... http://www.progressive-economics.ca/2010/09/04/gdp-defence/  The ILO and the IMF are holding an important high level conference in Oslo on the "Challenges of Growth, Employment and Social Cohesion" on September 13.  In advance, they have released an important joint discussion paper.  The summary  - highly reflective of the ILO contribution but not contradicted by the ... http://www.progressive-economics.ca/2010/09/03/fix-the-labour-market-to-end-the-crisis/ Michael Hlinka is the notoriously libertarian daily economics reporter on CBC Metro Morning (the flagship morning radio show in Toronto).  Our paths have crossed before; see my previous commentary: http://www.progressive-economics.ca/2009/07/11/another-economics-journalism-is-possible/ Michael's segment on September 1 (in conversation with host Matt Galloway) focused on the Statistics Canada GDP release.  It was a sensible ... http://www.progressive-economics.ca/2010/09/03/in-the-libertarian-deep-end/ Today, the Government of Saskatchewan announced that it is engaging the Conference Board of Canada to analyze the proposed Potash Corporation of Saskatchewan takeover. My first thought is to hope that the Conference Board does a better job on potash than it did on TILMA. My second thought is, “Doesn’t Saskatchewan have ... http://www.progressive-economics.ca/2010/09/02/conference-board-potash-review/ The Government of Saskatchewan wants nothing to do with a state (read China) corporation takeover of Potash Corp.  The Globe reports: "The Saskatchewan government signalled Wednesday that it is unlikely to support a takeover of the Saskatoon-based company by a sovereign wealth fund or other state-owned firm from China or other ... http://www.progressive-economics.ca/2010/09/02/capitalism-vs-state-capitalism-and-potash/ For those involved in social change work, these days can be frustrating ones. Just as the neoliberal order of tax cuts, deregulation, resource extraction and free trade seems to be maxed out, like the Energizer bunny it keeps coming back. Meanwhile, progressive forces (academics, unions, NGOs and political parties) can ... http://www.progressive-economics.ca/2010/09/01/what-are-the-game-changers/ Yesterday's GDP numbers were worse than they seemed.  And they highlighted a curious feature of modern capitalism.  Nowadays, non-financial businesses have become major net lenders to the rest of the economy.  Instead of borrowing money (in various forms: debt, equity, etc.) from other sectors to finance real investment, non-financial businesses ... http://www.progressive-economics.ca/2010/09/01/capitalism-upside-down/ UPDATE (September 1): Quoted in The Toronto Star. Canadian Gross Domestic Product (GDP) grew modestly in the second quarter, but that modest growth returned GDP to a level not seen since before the economic crisis. Recent Developments: The Second Quarter Canada’s output expanded at a quarterly rate of 0.5%, which corresponds to an ... http://www.progressive-economics.ca/2010/08/31/gdp-canada-gets-its-head-above-water/   With the US on the brink of a relapse into recession or, at best, a period of very slow growth and rising unemployment, all eyes are on the Federal Reserve. After all, it seems to be the only show in town. The conventional wisdom is that there will be no ... http://www.progressive-economics.ca/2010/08/30/what-should-the-federal-reserve-do/ Here's a fascinating finding from an NBER study: "The Economic Crisis and Medical Care Usage," by Annamaria Lusardi, Daniel Schneider, and Peter Tufano (NBER study #15843). They undertook a broad public survey across 5 countries (the U.S., Canada, U.K., Germany, and France) on the economic and social impacts of the recession.  ... http://www.progressive-economics.ca/2010/08/30/recession-reduces-health-care-utilization/ A key issue arising from the proposed potash takeover is BHP Billiton’s musing about leaving Canpotex, the agency that has long marketed Canadian potash offshore. (Growing up near the railroad tracks in Regina, Canpotex train cars were a familiar sight.) Perhaps BHP believes that it alone has sufficient clout to manage ... http://www.progressive-economics.ca/2010/08/29/dont-know-much-about-canpotex/ As sometimes happens, I started writing a comment on Jim’s excellent post and then realized that there was enough material for a new post. I agree with Jim that Ottawa’s $130-million settlement with AbitibiBowater deserves more attention, but I have been waist-deep in potash. I think that my initial take on Abitibi’s NAFTA ... http://www.progressive-economics.ca/2010/08/28/abitibibowater-conservatives/ I have the following op-ed in today’s Regina Leader-Post. Below it is a table supporting my statement that “the mines that PCS owned in 1989 still account for 80 per cent of its potash production and capacity.” Privatizing Potash was a Costly Mistake The greatest tragedy in BHP Billiton’s $38.6-billion (U.S.) bid ... http://www.progressive-economics.ca/2010/08/27/potash-privatization/             Canada's federal government made an important announcement this week.  It was kept deliberately quiet: with a news release issued at 4:45 pm on a calm Tuesday in the middle of the late-summer news "dead zone."  But it should set alarm bells ringing for anyone concerned with the anti-democratic direction ... http://www.progressive-economics.ca/2010/08/27/harpers-130-million-chapter-11-giveaway/ An article in today's Globe and Mail discusses some new research funding for the University of Alberta.  In particular, the article notes: The U of A ranks second in total research funding, behind only U of T and up from fifth in 2006. This year, the U of A will spend ... http://www.progressive-economics.ca/2010/08/27/new-research-money-for-the-university-of-alberta/ Last week, I was in Halifax at USW’s Ontario-Atlantic district conference. It was a great conference in a great city. But having so many key people out of the office limited our response to BHP Billiton’s bid for the Potash Corporation of Saskatchewan. (Next time BHP launches a hostile takeover, it ... http://www.progressive-economics.ca/2010/08/26/steelworkers-on-the-potash-takeover/ I got this wrong first time round. Krugman commends Nick Rowe over at Worthwhile Canadian Initiative for his spirited views and writing on monetary policy. http://www.progressive-economics.ca/2010/08/26/krugman-on-rowe/ Prof.  Myron Gordon was an economist, a long-time member of faculty at the Rotman School of business at the U of T, and a founding member of the Progressive Economics Forum.  Sadly he passed away in Toronto on July 5 of this year. My Gordon was very influential with me, and I know ... http://www.progressive-economics.ca/2010/08/23/remembering-my-gordon/ One million. No, it’s not the number of posts that Armine has written about the census. (I count only 32.) A million is the number of times this blog has been viewed since Marc started it back in the summer of 2006. It has been an eventful few years in Canadian ... http://www.progressive-economics.ca/2010/08/22/one-million-served/ Paul Krugman agrees with my view that the bond market is signaling  long term economic stagnation rather than experiencing a bubble - and he is, of course, far more influential and cogent than I. "But the argument has become even stranger recently, as it has become clear that investors aren’t worried ... http://www.progressive-economics.ca/2010/08/22/more-on-the-bond-market/ Tom Flanagan, Steven Harper's guru in younger days and a political sherpa who helped guide the rise of the New Right in Canada in its early days, has put in his two cents on the census affair. It is a thoughtful piece, if somewhat predictable. But it leans on two ... http://www.progressive-economics.ca/2010/08/20/flanagan-on-the-census/ This morning, Statistics Canada reported that the implementation of Harmonized Sales Tax in Ontario and British Columbia helped drive the national inflation rate from 1.0% in June to 1.8% in July. By comparison, the Bank of Canada’s core inflation rate (which excludes tax changes and volatile items) edged down from ... http://www.progressive-economics.ca/2010/08/20/hst-and-consumer-prices/ There are many ways to view the legacy of Prime Minister Harper and his Government thus far, but few offer evidence that the processes and institutions of democracy are held with any esteem. The selection of the latest Governor General of Canada has been described as one such rare example. The process ... http://www.progressive-economics.ca/2010/08/19/selecting-the-next-chief-statistician/ The short answer to that question is that I don't know. I am not a believer in the infallibility of financial markets and perfect information and all that stuff. But the bond market is surely speaking loud and clear. As an aside, the media focus excessively on the ups and downs ... http://www.progressive-economics.ca/2010/08/19/is-the-bond-market-saying-that-capitalism-has-no-furure/ Don Tapscott nails it in his commentary in today's Globe and Mail. Everyone wants to see and not be seen.  That's getting less possible, even for the most guarded individual. Today's zeitgeist is Google, and the Google Zeitgeist is transparency.  The push-back  --- and every thesis has its antithesis, as all you ... http://www.progressive-economics.ca/2010/08/19/the-privacyinformation-trade-off/ Yes, yawn, fiscal federalism is pretty darn dull. But it is also pretty darn important.  The division of responsibilities and resources between the feds and the provinces is central to the shape of Canadian fiscal policy overall and to the level and design of a host of jointly financed programs, ... http://www.progressive-economics.ca/2010/08/19/whither-fiscal-federalism/ In the past few weeks some of Canada's most respected economic authorities, including Bank of Canada Governor Mark Carney, have voiced concerns over the fragility of the recovery, globally and at home.  Now Paul Krugman joins that chorus of Cassandras, pointing his finger straight at the wishful thinkers who ... http://www.progressive-economics.ca/2010/08/16/balancing-budgets-what-harper-should-be-worried-about-now/ The recent controversy over the long-form census has caused me to be a bit more suspicious of Statscan lately.  Two recent events in particular have left me scratching my head. First, as part of my doctoral dissertation research, I was trying to get ahold of (time series) social assistance statistics for all 10 Canadian ... http://www.progressive-economics.ca/2010/08/15/how-political-is-statscan/ Statement issued yesterday: RESOLVING THE CENSUS DEBATE Welcoming the Changes Announced on August 11th The National Statistics Council, the senior, external advisory group appointed by the government of Canada to advise the Chief Statistician, has noted the Government’s announcement that it intends “to remove threats of jail time for persons refusing to fill ... http://www.progressive-economics.ca/2010/08/13/national-statistics-council-statement-on-census/ On Thursday, the Globe and Mail's post-secondary education blogger, Alex Usher, wrote this piece, in which he argues that any increased government assistance with the goal of increasing access to university ought to be targeted to low-income students (and not consist of an across-the-board tuition reduction).  I have three points ... http://www.progressive-economics.ca/2010/08/12/should-we-reduce-university-tuition/ Since I last posted something on the Census here (August 1! Time flies!), every passing day has advanced the census story with dizzying speed. I've said it before: this story has more legs than a bucket of chicken. Here are the top notes of the last 10 days, ending in ... http://www.progressive-economics.ca/2010/08/12/the-medium-form-is-the-message/ Jack Boan retired from the University of Regina’s economics department before I began studying there. Although I never had the privilege of taking a class from him, I received a medal named in his honour. Recently, I was pleased to see Dr. Boan zing the Harper government with a couple of letters ... http://www.progressive-economics.ca/2010/08/10/jack-boan-bozone/ They are according to  a couple of  bank economists cited in a prominent story today's Globe who think the big loss of education jobs in July (down 60,000) is due to a failure by Stats Can to properly calibrate seasonal adjustment  to take account of  supposed recent changes in employment ... http://www.progressive-economics.ca/2010/08/10/are-the-july-education-job-loses-over-stated/ The Mark are running a contribution of mine on the latest job numbers and the continued need for special EI and job creation  measures. http://www.progressive-economics.ca/2010/08/10/stimulate-the-job-market/ Gwyn Morgan may have made a lot of money for EnCana shareholders, but I have rarely found his economic commentary in the Report on Business to be very well-informed. The main point he makes in today's column "New Economic Order Demands New Attitude" is accurate if familiar - Canada participates in ... http://www.progressive-economics.ca/2010/08/09/gwyn-morgan-misleads-on-global-trade/ From my colleague CLC Senior Economist Sylvain Schetagne: The performance of the labour market in July 2010 was catastrophic. The unemployment rate is back up to 8.0%. The number of full-time jobs in Canada decreased very rapidly in July, when 139,000 full-time jobs were eliminated. The number of permanent employees ... http://www.progressive-economics.ca/2010/08/06/an-appalling-jobs-report/ In recent months, Canada’s job numbers seemed a little too good to be true. Today’s Labour Force Survey paints a more sobering picture. Employment was somewhat lower in July, among both employees and the self-employed. Far more significant than the overall decline in employment was the replacement of 139,000 full-time positions ... http://www.progressive-economics.ca/2010/08/06/job-market-stalls/ My union was among many organizations listed in opposition to the senseless census decision in Wednesday’s Globe and Mail editorial. Three organizations were listed as supporting it. The Fraser Institute and National Citizens’ Coalition have understandable motives for wanting to eliminate the mandatory long form. First, there are libertarian “privacy” concerns. Second, ... http://www.progressive-economics.ca/2010/08/06/taxpayers-and-the-census/ I've blogged previously on this topic but it is worth revisiting in light of the Census debate.  The gold standard for looking at racial pay gaps is analysis of differences in earnings between Canadian born whites and visible minorities since this excludes differences between immigrants and non immigrants (most importantly ... http://www.progressive-economics.ca/2010/08/03/race-and-earnings-revisited/ While the Canadian economy has begun to recover from the “Great Recession” in terms of the level of GDP and overall job growth, unemployment and under-employment still remain well above pre-recession levels. The national unemployment rate in June 2010 was 7.9%, well up from 6.0% two years earlier. The number ... http://www.progressive-economics.ca/2010/08/03/employment-insurance-and-the-recovery/ James Altucher posted an interesting article and video making the case against sending your children to university. I commend him for questioning the credo that everyone should go to university, regardless of interest or aptitude. But I am not totally convinced by his analysis. Altucher gives short shrift to the fact ... http://www.progressive-economics.ca/2010/08/03/we-dont-need-no-education/ A superb article in the Toronto Star by Antonia Zerbisias, entitled "Who Are You", today features a fascinating interview with Dr Jan Kestle at Environics Analytics regarding their use of census data. In the print edition it has a data geek's centrefold! Two pages of how census ... http://www.progressive-economics.ca/2010/08/01/who-we-are-data-libre-and-census-watch/