The Default Option
Here former IMF Chief Economist Simon Johnson urges Greece to default rather than impose a swingeing austerity program. http://www.project-syndicate.org/commentary/johnson6/English
Read moreDo OECD Economists Read OECD Data?
I had the opportunity to meet late last week with the OECD Policy Mission to Canada – the folks who write the country reviews. These meetings are usually interesting and useful, though I find the OECD Economics Department to be ultra neo liberal in their orientation. Even so, I was a bit taken aback to read the following in their […]
Read moreKPMG on Corporate Taxes
Yesterday, I appeared on CBC’s Lang & O’Leary Exchange regarding corporate taxes in response to Ignatieff’s announcement and KPMG’s 2010 Competitive Alternatives report. (To watch the video, search for “langâ€, click “Most recentâ€, select March 31, and go 13 minutes in.) My co-panellist, John Risley, seemed more interested in talking about the “dinosauric†nature of unions and the need to […]
Read moreNational Post Drinks Fraser Institute’s Bathwater
The Fraser Institute is winning 6-0, at least in terms of The National Post’s coverage of its flawed study on stimulus. On March 24, The National Post reported this study on its front page while its business section, The Financial Post, ran an op-ed by the study’s authors. A couple of days later, The National Post published a column by […]
Read moreWho’s paying for the party?
Earlier this month the Economist ran a leader (editorial) and longer article asking and then largely answering who should for the costs of the economic crisis (public services and workers of course!). That’s when I wrote the piece that leads the March 2010 issue of the Economic Climate for Bargaining publication that I produce quarterly. (I was in a bit of […]
Read moreStrong Output, Weak Payrolls
GDP Halfway Home Canada’s Gross Domestic Product (GDP) blew past an important milestone in January. Output is now closer to the high-point attained before the crisis than to the low-point reached during the crisis. Specifically, GDP (in chained 2002 dollars) peaked at $1,241 billion in July 2008 and plummeted to $1,185 billion in May 2009. By January 2010, it recovered […]
Read moreThe Labour Movement and the Crisis
The Steelworkers are carrying on their historic and very brave battle with Vale-Inco up in Sudbury. Last week’s huge solidarity rally was a sign that the rest of the labour movement is finally waking up to the threat that this battle poses to all of us. Imagine a profitable global company like Vale, buying up a precious Canadian resource at […]
Read moreIgnatieff on Corporate Taxes
Last night, I went to sleep early before watching any coverage of the Liberal Policy Conference. This morning, a well-rested Erin Weir marched into the office with such purpose that I did not even look below the fold on The Globe and Mail’s front page. Imagine my pleasant surprise when I got an e-mail about Michael Ignatieff proposing to cancel […]
Read moreCurrency Cooperation, Crowding out and Other Myths
Belatedly, two days after the fact, the Globe picked up on Bank of Canada governor Carney’s discussion of the Bank’s model of the world economy (I blogged about that speech here) at a speech to the Ottawa Economics Association (OEA) last Wednesday. The Globe spun the story in an unusual way by suggesting that the Bank and its analysis (using […]
Read moreMercurial Productivity
Here is some of what Terry Corcoran wrote in today’s Financial Post about Bank of Canada Governor Mark “Carney’s suggestion that Canadian business has so far ‘disappointed’ because it has failed to revive Canada’s lagging productivityâ€: Central bankers appear to know many things, and have big fancy computer systems and economic models to tell them what’s happening in an economy […]
Read moreOntario Budget
Today’s provincial budget continues previously announced stimulus in the short term and projects severe, but largely unspecified, spending restraint in the long term. The most surprising new measure, a lower electricity rate for northern Ontario industry, is of little fiscal significance (costing just 0.1% of the budget). A less surprising measure of potentially greater fiscal significance is the attempt to […]
Read moreHow Effective Was the Stimulus?
When the global recession hit in late 2008, economic output and employment fell so steeply in such a short period of time that policy-makers were seriously concerned about the possibility of the downturn growing into a global depression. The sense of urgency led to unprecedented levels of multilateral economic coordination, with stimulus spending rolled out worldwide and significant deficits incurred […]
Read moreThe OEA Conference: Harmony and Discordance
The Ottawa Economics Association (OEA) held a conference today and yesterday evening. The usual suspects were in attendance saying the usual things: Mark Carney spoke about the need for China to understand the risks of the “paradox of thrift” (see my post from earlier today) that will be unleashed by fiscal consolidation. Don Drummond sang from the productivity choir book […]
Read moreFraser Institute on Stimulus: Take Two
Iglika makes several cogent, high-level criticisms of the Fraser Institute’s “analysis” of how much government stimulus has contributed to Canada’s economic recovery. However, I think that it is guilty of a far more basic flaw. To determine how much government purchases and investment contributed to economic growth, one would compare the increase in government purchases and investment with the increase […]
Read moreThe G-20 Growth Strategy: Self-Flagellation, Prayers and Threats
The media and pundits parsed Mark Carney’s speech today to the Ottawa Economics Association (OEA) every which way to Sunday today and concluded that Carney had effectively signaled the Bank’s intention to raise its target for the overnight interest rate sooner rather than later. But in all the hand wringing about the inevitability of rate hikes (do people ignore Japan […]
Read moreTales from the Mouth of the Fraser: Did Stimulus Spending Play a Role in the Recovery
Yesterday, the Fraser Institute published a new report, which argues that the government stimulus did not drive Canadian economic growth in the last two quarters of 2009 and suggests that government spending on infrastructure was useless for the economy. The report earned the scorn of Finance Minister Flaherty, who was quoted in the Vancouver Sun calling the report “poorly done […]
Read moreIncredible Shrinking EI Benefits
The number of Canadians receiving regular Employment Insurance (EI) benefits dropped by 47,700 in January, the largest monthly decline in years. As usual, the key unanswered question is whether these workers are no longer on EI because they found jobs or simply ran out of benefits. The Labour Force Survey indicates that employment rose by 43,000 in January, so it […]
Read moreThe Curious Case of the Missing Recovery
           We all know there’s an economic recovery out there, right? Because it said so, in the newspapers.            Problem is, no-one I know has actually seen the recovery. (I don’t have any friends who are bank executives. So all those multi-billion dollar bonuses being paid out by government-subsidized, government-protected banks? No-one I know got any of it.)            In […]
Read moreCongress Passes Healthcare – I Told You So
This evening, the U.S. House of Representatives passed Obama’s healthcare bill. Two months ago, I was the odd man out on a Business News Network panel (watch video). The day after the Massachusetts by-election, I was talking about Democrats redoubling their efforts and being more aggressive in putting forward a progressive agenda. By contrast, one of my co-panellists said, “The […]
Read moreCorporate Tax Incidence and Social Democracy
Over at Worthwhile Canadian Initiative, Stephen Gordon critiques the last federal NDP platform’s reference to “Canada’s wealthiest corporations†on the grounds that people, not corporations, own things. But as Declan points out in several pithy comments on Stephen’s post, corporations clearly can and do own things. The corporations that own the most valuable things in Canada can quite reasonably be […]
Read moreC. D. Howe on RRSP Limits
Yesterday, the C. D. Howe Institute released a brief estimating how much Canadians at various income levels would need to save, through pension plans or individually, to provide various levels of retirement income. Since the Canada Pension Plan tops out around the average industrial wage and Old Age Security is clawed back from higher incomes, those who make more money […]
Read moreTransatlantic Echo Chamber
The big news for Canadians from the OECD’s Going for Growth 2010 report was that we should privatize Canada Post. An article in the current issue of Maclean’s (pages 26 and 27), which does not (yet) seem to be available online, sheds some interesting light on that recommendation: [Yvan Guillemette was] working for the C. D. Howe Institute, the prominent business-oriented […]
Read moreWill the Loonie Own the Podium?
The main question about this morning’s Consumer Price Index is whether it will propel the Canadian dollar to parity with the American dollar. Higher inflation would increase the chances of our central bank raising interest rates sooner rather than later. Higher interest rates would make the loonie a more attractive holding for international financiers. In fact, today’s figures show the […]
Read moreMcGuinty, the CCPA and the HST
Ontario Premier Dalton McGuinty has taken a shine to the Canadian Centre for Policy Alternatives (CCPA). Over the past month, he and other Liberals have repeatedly cited it. Indeed, McGuinty invoked the CCPA’s name four times in the provincial legislature on February 17. However, he first did so the day before that: Ms. Andrea Horwath: Can the Premier explain why, […]
Read moreIt’s Not What You’ve Got, It’s What You Do With It
I recently had the joy of spending a couple of weeks in Kerala, the little socialist state at the bottom tip of India. Apart from exquisite food, friendly people, beautiful jungles, and welcoming climate, Kerala’s greatest asset of course is its astonishing record in producing a literate, healthy, politically engaged society — all on the strength of a very modest […]
Read morePeddling GHGs
My colleague Bill Rees likes to say that fossil fuels are a powerful hallucinogenic drug. We are all addicted to cheap and abundant fossil fuels, and so have reshaped our economy and society in fundamentally unsustainable ways. In a recent post, I highlighted some research that breaks out of the box of counting emissions only where they occur (the standard […]
Read moreFederal Budget Redux
In the last couple of years, Relentlessly Progressive Economics delivered detailed analysis the evening after the budget by bloggers who had been in the lock-up. Last week, those of us who were in Ottawa dropped the ball. However, Marc picked it up by assessing the budget remotely from Vancouver. My main excuse is that, after drafting USW’s press release, I […]
Read moreGoofy Oil-Industry Advocacy
The Alberta government is reversing its modest increase in conventional oil and gas royalties. Albertans will now receive an even smaller fraction of the value of their resources. The saving grace is that the provincial government did not cut royalties on the oil sands, which are projected to provide more revenue than conventional reserves going forward. Corporate executives welcomed Thursday’s […]
Read moreEmployment Picture Improves
Today’s Labour Force Survey paints an appreciably improved picture of Canada’s job market. In February, full-time employment rose by 60,000 and part-time employment fell by 39,000. Employers are not only hiring more workers, but also upgrading part-time positions to full-time positions. Almost all of the part-time jobs created in January became full-time jobs in February. Importantly, this employment gain reflected […]
Read moreNational Post Exposes Media Bias
Yesterday, The Winnipeg Free Press ran a column that quoted some material from this blog and some other progressives. The National Post’s blog features the following retort: In her reaction to Budget 2010, the Winnipeg Free Press’s Frances Russell quotes the following: Larry Brown, national secretary treasurer of the National Union of Public and General Employees; Erin Weir, an economist […]
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