Author: Jim Stanford

Picking Winners (Who Are Already Winners)

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The CCPA just published a mini-study by yours truly on how the coming federal corporate income tax cuts will exacerbate regional inequalites in Canada. Here’s the link for the full study: http://www.policyalternatives.ca/Reports/2008/05/PickingWinners/index.cfm?pa=BB736455 Finance Minister Jim Flaherty and his colleagues like to pretend they are “neutral” in their economic policy-making.  That is, they don’t “pick winners.”  They just create an efficient, […]

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Economist as Renaissance Man

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OK this is silly, but whatever… I was invited to participate in a most excellent annual fund-raising project sponsored by Creative Works Studio — a Toronto initiative that uses art therapy with the mentally ill.  They invite a number of so-called “celebrities” (definitely stretching the definition in my case) to actually paint a picture, that gets auctioned off at a […]

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Fiscal Economics 101, for Jim Flaherty

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How about this latest gem from our let-the-market-rule Finance Minister: Les Whittington Ottawa Bureau, TORONTO STAR (APRIL 10) OTTAWA–Finance Minister Jim Flaherty says the Conservatives will cut government spending if need be to avoid a budget deficit caused by the economic slowdown. “No deficit – balanced budget,” he said outside the Commons. “We’re not raising taxes,” Flaherty added when asked […]

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Shocking FDI Statistics

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No this isn’t the Economics National Enquirer.  I mean shocking.  Really shocking. Hasn’t anyone else out there noticed what’s happened to Canada’s net FDI position, in the wake of the mega-massive takeovers of Canadian resource companies that have occurred as a result of the global commodity price boom?  Resource companies with more money than they know what to do with […]

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Ottawa’s Automotive Tax Grab

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Even Jim Flaherty’s “We Don’t Pick Winners” Conservatives were under pressure in this budget to do something for the auto industry.  The fact that at least a dozen swing ridings in southwestern Ontario could determine the outcome of the next election might have something to do with their sensitivity to the continuing industrial destruction being wrought in what is still […]

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Pity the Poor Capital Gains-Makers

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I am glad that Jim Flaherty’s budget did not actually come through with a rumoured exemption for capital gains income.  Recall that the Conservatives’ 2006 platform had promised a ridiculous and unworkable exemption from income taxes on capital gains so long as the winnings were “re-invested.”  This high-profile broken promise still clearly niggled the Harper government, and expectations were high […]

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The Pitfalls of the “Service Economy”

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In working on the CAW’s recent submission to the Red Wilson panel, I did a bit of work to debunk the common argument that the growth of the “services economy” can somehow offset the damage that is occurring these days to our manufacturing sector and other tradeable industries. Here is the link to our full submission (which is introduced in […]

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Structural Regression, the Energy Boom, and Deindustrialization

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I want to encourage folks to look through the CAW’s detailed submission to the federal government’s panel on competition policy (headed by Red Wilson).  Here is the link: http://www.caw.ca/whoweare/CAWpoliciesandstatements/pdfs/CompetitionInvestmentPanel.pdf I think it’s a major statement about the structural transformation occurring in Canada’s economy as a result of the global commodity boom.  Basic summary: high global commodity prices have boosted the […]

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Toronto Fiscal Panel: The View From Inside

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I recently took a crash course in the fascinating, challenging economics of municipal finance. I was one of the 6 members of the independent panel that was formed to review the City of Toronto’s fiscal situation. The panel issued its report last month. Most progressive economists have long recognized the growing economic importance of cities, and the urgent need for […]

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We May Look Rich, But We Aren’t Rich

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Statistics Canada released an interesting but utterly misleading technical paper last week on Canada’s supposed “Reversal of Fortune.”  They examined Canada-U.S. comparisons in national income (a concept that is subtly but importantly different from GDP, as I’ll explain in a minute), and decided that Canada has become the star economic performer of the continent.  Since 2002, our real national per […]

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Canada’s Un-Development and the Loonie

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The Commons Finance Committee, spurred by my old debating opponent John McCallum, is holding hearings in the next two weeks on the economic and fiscal consequences of the loonie’s unsustainable flight. (I kind of miss crossing swords with John, actually: In the good old days he was the evil but friendly Bay Street banker, justifying federal spending cuts — and […]

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Terms of Trade Effects in Canada’s Economy

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Heather Scoffield had an interesting little “how-to” guide in Saturday’s Globe and Mail on the macroeconomic effects of the improvement in Canada’s terms of trade (the result of soaring global prices for the resources which Canada increasingly exports). The terms of trade, for the blissfully uninitiated, is the ratio of a country’s export prices to its import prices.  You can […]

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Capitalism and Voluntarism

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The whole idea of the free-market is that the relentless pursuit of self-interest leads people to do greedy things that ultimately benefit all of us. That’s what makes it so humorous to see that appeals to voluntarism have become one of Finance Minister Jim Flaherty’s major policy tools. At least there was a bit of poetic justice in his phony, […]

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Free Trade: A “Service for Business”

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Here’s a Freudian slip worthy of the internet age. Go to the home page for the Department of Foreign Affairs and International Trade: http://www.dfait.gc.ca/index.aspx To find their section dealing with free trade negotiations, you go to the menu on the left, under a category titled “Services for Business.” We certainly couldn’t list free trade negotiations as constituting a “Service for […]

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A Black Day for Canada

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Further to my companion post (on the Commodity Price-Exchange Rate Transmission Mechanism), here is an op-ed from Buzz Hargrove that appeared in today’s National Post, responding to yesterday’s parity event. It reflects some of the arguments I made in the companion post about why, exactly, higher commodity prices drive our loonie higher.  The policy implications of this view include some […]

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The Commodity Price-Exchange Rate Transmission Mechanism

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Well, it happened. The petro-fueled loonie broke parity with the greenback yesterday, and is headed higher still. I can’t believe that so many people still interpret this as a symbol of our national renaissance.  In fact, the reverse is true.  The dollar’s flight both reflects, and simultaneously reinforces (in fine Kaldorian fashion) our regression into serving once again as a […]

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Exchange Rates as Policy Target: The Japanese Case

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How do we explain the behaviour of the Japanese yen — which has not only avoided the major appreciation (against the U.S. dollar) that other major currencies have experienced (most acutely including Canada’s), but is actually down by over 15% since 2005 (despite Wall Street’s financial wobbles)? Japan has the world’s third largest trade surplus, so if exchange rates reflect […]

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Exchange Rate Appreciation and Manufacturing Investment

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An interesting article just published by my friend Robert Blecker (American University) reinforces our concerns regarding the long-run impact of the loonie’s recent appreciation on the size and competitiveness of Canada’s manufacturing industry. Here’s the formal citation & abstract: The Economic Consequences of Dollar Appreciation for US Manufacturing Investment: A Time-Series Analysis Author: Robert A. Blecker a Affiliation: a American […]

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The Dangerous Shortage of Government Bonds

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Here’s an interesting sidebar to the current hissy fit roiling financial markets:  It has turned out that Canada’s public debt is now dangerously low. Huh? We all know that where debt is concerned, private is good and public is bad.  That’s why we cheer on consumers as they pump up their indebtedness to a record ratio (over 100%) of disposable income, […]

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Been There, Done That, Got the T-Shirt

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Forgive me for greeting the latest financial meltdown with a big yawn. We are facing a combination of two textbook cycles, neatly overlaying each other: 1. Classic speculative cycle:  something catches the eye of speculators, they drive it up in price in search of (utterly unproductive) speculative profits, the rising price produces a self-fueling speculative bubble, and then something happens […]

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Bank of Canada Rides Over the Hill

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Nice to see the Bank of Canada swinging into action the last couple of weeks, pumping many billions of dollars of liquidity into financial markets to ease the sub-prime-inspired credit crunch, and making very hard-nosed statements about its intention to “defend” its desired interest rate regardless of where the markets want to go. Now that’s my kind of central bank. […]

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Alberta Distortions

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I am big on big investment spending.  I’ve argued for years that weak business investment undermines our job creation, our productivity, our incomes, and our competitiveness.  I’ve proposed lots of policy measures to stimulate more investment spending: public as well as private. But what’s happening in northern Alberta is enough to nauseate even a Soviet-esque advocate of mass capital accumulation […]

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There’s blood on the factory floors: where’s Ottawa?

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For once the headline-writers at the Globe gave my latest column (on continuing job losses in manufacturing) a better headline than the one I suggested (which in this case was a bland one: “Why manufacturing matters” zzzzzzzzzzz). Mind you, even their “blood on the floor” headline was not as eye-grabbing as Philip Cross’s year-old quote about carcass-hackers in Brandon Manitoba. […]

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More free trade: Australia & China

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Well, I finally got my name into the Australian papers.  So I guess I can come back to Canada now.  (We’re flying home, sigh, in another few weeks.) I worked with the Australian Manufacturing Workers’ Union (sister union, sectorally and politically, to the CAW) to produce a critique of the proposed Australia-China free trade agreement.  We used a similar “job […]

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Canada’s Curious Deglobalization

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Everyone knows globalization is an irresistible worldwide process enveloping every economy, including Canada’s, in its market-driven tentacles.  Right? Wrong. In fact, since 2000, Canada’s economy has been curiously de-globalizing before our eyes.  The importance of global markets to our employment and production has been diminishing, not increasing – and at a remarkable pace.  Year-end GDP numbers for 2006, recently released […]

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Big Business Endorses Big Spending!

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Riddle: When is a Liberal budget, not really a Liberal budget? Answer: When big business loves it! There’s a fascinating sidebar to Jim Flaherty’s big-spending vote-buying budget last week, in the strongly favourable reaction which it received from the business community.  All the pundits’ complaints about the budget being “more Liberal than the Liberals” are actually welcomed by the Tories, […]

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Compass U.K. Progressive Economic Program

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I shared the podium recently in Sydney with Neal Lawson, who is the chairperson for a very interesting U.K. initiative called Compass.   As far as I can tell, Compass is kind of a cross between a think-tank and an activist network.  Its explicit goal has been to challenge the right-wing policies of the New Labour leadership.  It functions largely, but […]

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Building Empires, or Building the Economy?

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The CAW has merged with about 35 smaller unions since we were formed in 1985.  That doesn’t stop me, however, from questioning the economic usefulness of Canadian corporate mergers.  M&A activity last year reached an incredible $270 billion.  That’s 20 percent of our GDP.  And what good actually comes from it?  At best, the M&A boom is a sideshow.  At […]

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