The global economy is in free fall, gripped by what the International Monetary Fund calls the“Great Recession.†In a crisis that is unfolding everywhere at once, global trade and production are slumping, unemployment is soaring, pension funds are evaporating, big global banks are still teetering on the edge of insolvency (if they are not already insolvent), stock markets are cratering, […]
Read moreMost regular folks and media pundits seem to assume that the public sector is recession-proof – hence all those nasty calls for wage freezes, cuts and pension rollbacks on the part of supposedly cosseted government workers from the CFIB and other right-wingers. In point of fact, it’s a myth. Since October, 2008 – when employment began to fall – through […]
Read moreHere’s a perhaps rather obvious thought prompted by reading an outline of the next OECD Employment Outlook. In a period of high and likely prolonged unemployment, governments should increase their investment in training of the unemployed by an amount at least in line with the increase in unemployment. Budget 2009 fails that test. Spending on training under Part II of […]
Read moreSince October, 2008, the national unemployment rate has jumped sharply from 6.3% to 7.7% – driven entirely by job losses. The participation rate has fallen over the same period, from 67.8% to 67.4%. If this had not happened, the rise in the unemployment rate would have been even greater. As well, we have seen a shift to part-time jobs. The […]
Read moreA thought-provoking piece from the Asia Times – apparently China is drawing on hidden forex reserves to purchase real assets such as stakes in resource companies – diversifying away from the US Treasury bubble in a non trivial way and perhaps setting the stage for a collapse of the US dollar. http://www.atimes.com/atimes/China_Business/KC18Cb01.html
Read moreTrade Unions to G20: Â Half Measures Will Not Fix Broken Global Economy Brussels, 23 March 2009 (ITUC OnLine): In a worldwide push for action by G20 governments to pull the global economy out of recession and chart a new course for job creation, financial regulation and global governance, trade unions across the world are today delivering a common set of […]
Read moreEric Pineault is the designated hitter on the topic of financialization but I thought I might make a small contribution to get the discussion rolling. I’ve been reading Galbraith’s The Predator State — see a review here — and it got me to thinking just how little our federal government — and governments elsewhere — has done to radically change […]
Read moreAh plastic. What’s not to love? Convenient? Check. Light in the pocket? Check. Monthly bill summaries? Check. Free short-term credit? Check (provided you pay your bills in full, on time). Benefits (free car rental insurance, points, cash back etc): Check AND… Take from the poor and give to the rich? err… wait a minute. Unfortunately, credit cards — especially those […]
Read moreI happened to listen to the end of week media pundits on CBC Newsworld and CBC Radio late Friday afternoon. Most – especially Don Martin and Joan Bryden on Newsworld – seemed perplexed as to why former Bank of Canada Governor David Dodge might have chosen to be distinctly more gloomy abour our economic prospects than Steven Harper or Mark […]
Read moreI came across an interesting piece in YES! Magazine about a city in Brazil that took an innovative approach to poverty reduction and practically ended hunger by adopting a food-as-a-right policy. Here is their story in a nutshell (although I recommend checking out the actual article). Belo Horizonte is the fourth largest city in Brazil with a population of 2.5 […]
Read moreThe increase in consumer prices between January and February suggests that the threat of deflation may be less imminent than it appeared during the previous five months of falling prices. Whereas three provinces actually posted negative inflation rates in January, all posted positive inflation rates in February. Today’s Bloomberg report begins by noting that this data “may ease pressure on […]
Read moreOnce in a while, I come across a blog post that is so on-point I cannot add much more than a link to it. With CBC broadcasting this year’s edition of Canada’s Next Great Prime Minister tonight, I highly recommend this post on the contest’s boneheaded entry requirement. The rule is as follows: “It is a condition of entry and […]
Read moreLiberals are proposing to slash Nova Scotia’s corporate income tax rate for small business from 5% to 1%. We have seen this movie before. New Brunswick announced a 1% small business rate by 2007 only to instead restore a 5% rate that year. Nova Scotians might reasonably ask why their provincial neighbour abandoned the 1% plan. Part of the story […]
Read moreA couple of weeks back, I posted on the topic of “quantitative easing,” the policy of having the central bank aggressively purchase government (and possibly corporate) debt in the open market ostensibly to increase the money supply. I argued that at best, quantitative easing was a pricing operation that worked at the margin by increasing demand for a given asset […]
Read moreIan Brown has a wonderful column in today’s Globe which rightfully suggests that maybe, just maybe, people should be a little upset about all the false promises of endless prosperity and perfect social harmony that were made in the leadup to the current economic and financial crisis. Maybe, just maybe, the “system” must bear some responsibility for this collapse. But […]
Read morehttp://epi.3cdn.net/5986248785fbbcf2e6_ufm6iv2yk.pdf Prominent US economists endorse positive role of unions and call for support of Employee Free Choice Act
Read morePreliminary reports on this morning’s Labour Force Survey emphasize that the unemployment rate reached its highest level since 2003. However, the situation is far worse in absolute terms. The number of officially unemployed Canadians rose by 106,000 in February, pushing the total over 1.4 million. In other words, the ranks of Canada’s unemployed swelled to their highest level since February […]
Read moreIt is one of those publications that few media outlets will report on, and even fewer British Columbians will read, but BC Stats just released the latest version of its Local Area Economic Dependencies, updated based on 2006 census data. This publication basically asks where the income in various BC communities comes from. In many communities the resource sector is […]
Read moreAmid speculation that the Government of Ontario may harmonize its provincial sales tax with the GST, today’s Toronto Star reports, “The government has offered no analysis to determine how much of a benefit or a drain harmonization would be on the provincial treasury.” I have seen at least one estimate from outside government. Michael Smart and Richard Bird wrote a […]
Read more(Additions made to this post since first posting.) The Prime Minister’s optimistic remarks about the prospects for Canada to get out of the recession faster than other countries just as the IMF and World Bank were announcing a Great Recession ring rather hollow (though, in truth, if I were in his shoes I would not be inclined to spread further […]
Read moreYesterday the CCPA released a new study on family income inequality in BC by yours truly, which reveals some disturbing statistics about family incomes over the past 30 years. The figure below summarizes our main findings. Among our other key findings: The gap between the wealthiest and the majority of BC families has grown dramatically over the past 30 years. […]
Read moreThe political crisis around the Caisse’s dismal performance continues to haunt the political scene in Québec. Urged to explain how up to 40 billion dollars might have been lost during his management Caisse ex-director Henri Paul Rousseau largely blamed the economic and financial crisis, factors beyond his control. Asked why and how the Caisse ended up with so much ABCP […]
Read moreAndrew Coyne takes on public pensions in the current edition of Maclean’s (which does not yet seem to be available online). He not only criticizes the Caisse de Dépôt’s lousy investments, but calls for doing away with the Canada and Quebec Pension Plans (CPP and QPP). Coyne’s secondary headline (and primary argument) is, “Compulsory plans like the CPP expose older […]
Read moreIt has come to my attention that some economists claim that our sovereign federal government is more or less powerless to kickstart the economy because of our great dependence on the United States and therefore should do next to nothing: “Mr. Orr and other economists urged Ottawa to ignore pleas to boost stimulus spending further – a move that would […]
Read moreThe Liberals have promised to monitor the impact of the federal Budget through regular “report cards” on government performance. One key issue to look at is the adequacy (meaning inadequacy) of the EI program at a time of rapidly rising unemployment. The Budget did move very modestly on this front, adding five weeks to eligibility in each EI region, thus […]
Read moreLast week, the British Columbia government announced that its $2.5 billion public-private partnership (P3) deal for the Port Mann bridge expansion had failed and that it would now finance the project directly instead. Â Despite the failure of the P3 financier, Macquarie, to put together a deal the Province is still going to pay them for financial advisory services, which […]
Read moreThere has been much talk, of late, about the ineffectiveness of conventional monetary policy — i.e., lowering the target for the overnight interest rate to incite borrowing and hence economic expansion — and the need for monetary authorities to consider something more dramatic, like so-called “quantitative easing” — the active buying of government debt and other securities in the open […]
Read moreThe Canadian media didn’t pay much attention to this economic crisis before the stock markets plunged last fall, and that has continued to be a major focus. But this focus on the stockmarket and the mistaken perception that this crisis is all the fault of the U.S., is leading to the overly optimistic forecasts of recovery. There’s been very little attention […]
Read moreOne of the silliest leads to an economic story I have read in a long time is on the front page of today’s Globe under this headline: http://www.theglobeandmail.com/servlet/story/RTGAM.20090303.wreconomy03/BNStory/Business “It’s Not all Doom and Gloom: GDP’s Drop Suggests Recession Will be Short.” The huge drop in output last quarter is perversely seen by the writer and some supporting bank economists as […]
Read moreKudos to the Bank of Canada for significantly reducing its target interest rate from 1% to 0.5%. A month ago, it took the position that already-announced monetary and fiscal stimulus was sufficient to propel a swift economic recovery later this year. Today, in both word and deed, it acknowledged worsening economic conditions and the need for more stimulus. Why Not […]
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