The front page of today’s Globe and Mail reports the latest chapter in the federal attempt to create a national securities regulator. (Premiers push back against national securities regulator plan).  Part of the Harper government’s response to the financial crisis was to promise to remedy the patchwork of provincial securities regulators. If securities regulators are going to avert future […]
Read moreBack in May when Greece was in the process of getting its “bailout” I kept wondering why it had to be that Greece would accept such harsh conditions when it held an ace up its sleeve. The proposed package of austerity, which would make the economy worse, was only an issue as long as Greece felt it needed to stay […]
Read moreSo, Export Development Canada (EDC) has agreed to lend Vale up to $1 billion US. This announcement comes on the heels of a bitter labour dispute at Vale’s Sudbury mines and in the midst of an ongoing strike at its Voisey’s Bay operations. The financial rationale is unclear. Although $1 billion is very large for an EDC loan, it is […]
Read morePaul 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 about deficits; they’re worried about stagnation and deflation. And […]
Read moreThe 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 of the stock market. But bond markets are at […]
Read moreWhenever the stock market falls, CNBC’s Larry Kudlow reliably blames the Obama administration’s allegedly anti-business policies. But when the market was rising on Obama’s watch, Kudlow generally did not talk about it. On tonight’s show, he took a different tack. He repeatedly asserted that the market has recently rallied not only on strong corporate profits, but also because Tim Geithner announced (on […]
Read moreAt the end of May in Quebec City at the annual Canadian Economics Association conference, the PEF awarded the second John Kenneth Galbraith Prize in Economics to John Loxley. Below is the full text of John’s Galbraith Lecture (pdf version with proper footnotes and formatting here). Congrats again to John for a lifetime of amazing work! Also, thanks to one […]
Read moreA recent visit by some Regina friends reminded me how affordable public automobile insurance is. They insure two cars, one of which is newer than my car, for about the same rate as my one vehicle in Toronto. My first car, which I registered with Saskatchewan Government Insurance (SGI), cost about $500 per year. My sense is that an under-25 male would have […]
Read more           A year ago, as part of his 2009 crisis budget, Finance Minister Jim Flaherty created a Task Force on Financial Literacy. The goal was to equip Canadians with more knowledge to traverse the minefields of high finance. This week, just in time for Flaherty’s next budget, the Task Force released its initial “consultation” report.            On one level, this […]
Read moreThe case for a Financial Transactions Tax or FTT has crept in from the margins remarkably quickly. One year ago, the proposal for an internationally co-ordinated “Tobin Tax†on foreign exchange transactions was a dim memory from the early part of the decade. Today, the idea of broadening such a tax to include a far wider range of transactions such […]
Read moreThe good folks at PERI at U Mass Amherst led by Gerry Epstein and Jane D’Arista have just launched a new web site so theirr useful work on why and how to reign in finance can be easily accessed. http://www.peri.umass.edu/safer/ “The Economists’ Committee for Stable, Accountable, Fair and Efficient Financial Reform (SAFER) is a focal point, clearinghouse and coordinating mechanism […]
Read more           This week marks the one-year anniversary of the collapse of Lehman Brothers: the darkest moment of the global financial crisis, when those in charge genuinely feared for the survival of their system.           This somber anniversary has sparked a modest flurry of retrospection in the media. But the dominant tone (Michael Moore’s new movie aside, of course) has not […]
Read moreThe London G-20 summit last fall may go down history as the meeting that saved the world. That’s a huge exaggeration of course, but leaders did agree to a program of co-ordinated monetary and fiscal stimulus which may have arrested an economic free-fall, and they agreed to an agenda for financial re-regulation with a view to making sure that it […]
Read moreThe WSJ is concerned about the implicit subsidy provided to financial institutions that are “too big to failâ€(TBTF). Given the obvious willingness of the US government to support Wall Street titans during the height of the financial crisis, the market is pricing in the expectation that the government stands behind those institutions regarded as TBTF. This implicit guarantee allows the […]
Read moreHere’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
Read moreMy 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 US and high risk foreign […]
Read moreHaving been chastised for giving what I thought was faint praise to Iggy for moving on EI a couple of days ago , I’m going to really, really stick my head out here and wonder if Alan Greenspan has a point when it comes to potential positive linkages between the stock market and the real economy. http://blogs.ft.com/capitalismblog/2009/03/30/equities-show-us-the-way-to-recovery/ I think that […]
Read moreI have enjoyed being one of the three economists appearing on the occasional “Bottom Line” panel which CBC TV has been running on its National News. My fellow panelists (Patricia Croft from RBC Securities and Mark Mullins of the Fraser Institute) are personable, informed, and for the most part non-dogmatic about things. (I know it will surprise many PEF readers […]
Read moreIt makes my blood boil when I see headlines like this one from the Globe online: “Economic optimism boosts markets”. They are, of course, not talking about the markets that matter for most families’ day-to-day lives – those markets are still tanking. No, the Globe is talking about the stock market, as if an uptick of optimism among our financial […]
Read moreFile this one under “painfully ironic”: The Ontario Securities Commission (public agency charged with monitoring the behaviour of the stock market industry) recently advertized for a Senior Economist. Duties include collecting & interpreting data, monitoring developments in securities markets, helping Commission staff understand economic concepts, blah blah blah. The fun part is the compensation: competitive salary, benefits, and — here’s […]
Read moreMartin Wolf of the Financial Times has written a pretty scathing critique of the new US Administation’s overhaul of the TARP program. I am increasingly convinced by Duncan Cameron’s argument that – in the US at least – the best way out is to nationalize the banks, run them as a public utility, and compensate the shareholders only if there […]
Read morehttp://www.tuac.org/en/public/e-docs/00/00/03/91/document_doc.phtml This is a very useful discussion/policy paper from Pierre Habbard of the Trade Union Advisory Committee to the OECD. Executive summary 1. The latest phase of the financial crisis that broke out in the summer 2007 was marked by a dramatic turn in mid-September with the collapse of Wall Street, US insurance group AIG, and the subsequent asset destruction […]
Read moreI highly recommend “The Credit Crunch: Housing Bubbles, Globalisation and the Worldwide Economic Crisis” by Graham Turner. “Graham Turner is one of only a handful of economists to understand the roots of the current financial crisis, its implications for all of us and crucially what should be done now. I strongly recommend you read this book.” —Larry Elliott, Guardian “A […]
Read moreThere’s been a fair bit of coverage recently about the big hit to defined benefit pension plans as a result of collapsing equity markets. That’s not a pretty sight, and many plan sponsors face serious short to medium term difficulties in financing their plans as funding deficits increase. But, most pension plan members can still count on getting the pension […]
Read moreInternational labour leaders including CLC President Ken Georgetti met with the heads of the IMF and World Bank, President Lula of Brazil and several other G-20 leaders before the summit to speak to the major trade union statement which called for immediate, co-ordinated action to avert a global jobs crisis, and fundamental reform of the de-regulated global financial system which got […]
Read moreThis statement is well worth reading, and may have some modest influence on the meetings. Brussels, 13 November (ITUC OnLine): Trade union leaders from the G20 countries will put forward a comprehensive plan to turn around the global economy, in meetings with world leaders in Washington DC on the eve of the financial crisis summit hosted by the US government […]
Read moreEric Helleiner and Stefano Pagliari have written an excellent briefing note on the politics of regulatory reform heading into the summit. In a nutshell, they argue that Franco-German initiatives to regulate some key elements of global finance – executive compensation rewarding extreme short termist, risky behaviour; off balance sheet activities; the fringe banking sector; over the counter derivatives – have […]
Read moreI debated Bill Watson from McGill on the economic crisis and the need for a “Bretton Woods II” for a half hour or so on the Sunday Edition, on CBC Radio. I found him more than a tad complacent myself – markets will bottom out and it would be a mistake to re-regulate neo liberal global capitalism and imperil all […]
Read moreHere’s the full version of the summary posted earlier – a much longer analytical section, and more detail on our suggested policy response. http://canadianlabour.ca/en/clc-response-economic-crisis-full-version CLC Response to the Economic Crisis Global capitalism: on the edge of the abyss Dramatic recent events have thrown into sharp relief some chronic and long-standing problems of our global and national economic system: an over-developed […]
Read morehttp://canadianlabour.ca/en/clc-response-economic-crisis-summary This call for government action was the result of deliberations at yesterday’s meeting of the CLC Executive Council, and reflects prior discussions among union economists. This is the summary. I’ll post the long version after it has bene translated and posted to the CLC web site. CLC Response to the Economic Crisis (SUMMARY) Global capitalism: on the edge of […]
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