Letter to the Queen: Why No One Predicted the Crisis Her Majesty The Queen Buckingham Palace London SW1A 1AA 29 July 2009 MADAM, In response to your question why no one predicted the crisis you have recently received a letter from Professors Tim Besley and Peter Hennessy, sent on behalf of the British Academy. They claim economists’ failure to foresee […]
Read moreI normally hesitate to make short term economic prognostications and the Bank of Canada could indeed be right that growth might tip over the cusp from negative to positive in the third quarter as the first sign of a “nascent recovery” from the Great Recession. As many have noted, including Jim on the National on Thursday night, a mildly positive […]
Read moreMy friend and former union (AFL-CIO) economist colleague Tom Palley has produced a characteristically lucid piece on the macro economic roots of the US and global crisis for the New America Foundation. He interprets our predicament as a crisis of the neo liberal growth model and not as a failure of financial regulation or, for that matter, conventional macro economic […]
Read moreA thoughtful op ed from today’s Ottawa Citizen by Peter Victor, the author of “Managing Without Growth” (Edward Elgar)Â on the case for a no growth future. http://www.ottawacitizen.com/business/fp/Bigger+better/1590471/story.html Here’s an extract: “Although no 21st-century Keynes has emerged to prepare the intellectual ground for such a change in thinking, we do have a body of knowledge built up over many decades […]
Read moreI was out of the country but have the impression that the extremely gloomy OECD forecast and critical recommendations for Canada released just before the G20 London summit were not given the attention they deserved. http://www.oecd.org/document/59/0,3343,en_2649_33733_42234619_1_1_1_1,00.html The OECD released its intermim outlook largely to push the case for more stimulus by G20 countries, particularly those, like Canada, with strong fiscal […]
Read moreIn 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 Credit Facility); the […]
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 morePEF 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:
Read moreI wasn’t originally planning to write a longer analysis and critique of Flaherty’s fiscal and economic statement beyond our immediate response because, like most people, I expected it would at least show some reasonable recognition of the problem and at least the framework for a stimulus program (besides, I had young children to pick up from school, feed and put […]
Read moreMuch has been written on this blog about immediate responses to the crisis. We have analyzed proposed measures in depth and advocated for bold novel solutions. But it seems to me that we haven’t spent much time looking forward a little past the here and now. Last week, I was contacted by a Montreal-based journalist, Alex Roslin, who was looking […]
Read moreI’m just back from visiting family in England, and got to have a first-hand look at how the economic crisis is playing out on the other side of the Atlantic. Suffice it to say, it is the dominant story. Before we left, the Bank of England cut short-term interest rates by 1.5% and it was revealed that they had contemplated […]
Read moreI was intrigued by what is happening in Iceland, so the following is a piece I’ve written on it. It has some introductory macro-economics in it, which I think it is good to keep in perspective as we consider the frantic attempts being made to prevent an economic depression. The economic and financial collapse of 2008 is shaping up to be […]
Read moreLettre ouverte de la part d’économistes canadiens à propos de la crise économique actuelle et la réponse du gouvernement qui s’impose La crise financière mondiale qui s’aggrave, la chute des prix des matières premières à l’échelle mondiale et le risque grandissant d’une récession mondiale dévoilent des faiblesses inquiétantes de l’économie canadienne. Le simple fait de nous en remettre à nos […]
Read moreThe Progressive Economics Forum’s open letter is now making the rounds. Signatories include four chairs of economics departments, two former Presidents of the Canadian Economics Association, a former federal Secretary of State (Finance), and a former Quebec Minister of Industry. Here’s the text and the 88 signatories: Open Letter from Canadian Economists on the Current Economic Crisis and the Appropriate […]
Read moreThe 110 page U.S. Emergency Economic Stabilization Act of 2008 is certainly better than Paulson’s original 3 page proposal, but it falls so far short of what is needed that I wonder whether it will do more harm than good.  Despite its growth in size, it is still little more than a bail-out-come-swap financing deal for the  financial sector. The question […]
Read moreHere’s a statement from the Secretariat of the Trade Union Advisory Committee to the OECD (TUAC) http://www.tuac.org/en/public/e-docs/00/00/03/13/document_news.phtml The dramatic events on the US and global financial markets in the past days – the collapse of Lehman Brothers, the takeover of Merrill Lynch by Bank of America and not least, the government bailing out of AIG, the largest insurer in the […]
Read moreWell. 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 lot, I think, about the true […]
Read moreI was in Washington last week for meetings of economists from central trade union bodies, mainly from the OECD countries. While the main purpose of the meetings was to draft the annual union statement to the upcoming G-8 summit in Japan, we had a full day of meetings with researchers and senior officials from the International Monetary Fund, and also […]
Read moreNouriel Roubini – professor at NYU and noted blogger on the global economy – tends to the gloomy but is now seriously worried about where we are headed. With the Economist now out with a front page story on the likelihood of a serious US recession, his views seem to be entering the mainstream. http://www.rgemonitor.com/blog/roubini With the Recession […]
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