Numbers Worse than Official Expectations Real GDP dropped by 1% in December 2008, as large a monthly decline as in the August 2003 blackout. The difference is that, whereas August 2003 was an aberration, December 2008 continues a worsening trend. During 2008 as a whole, the economy eked out 0.5% growth, which falls short of the 0.7% forecast by both […]
Read moreJeffrey Simpson has a good assessment in today’s Globe: Mr. Obama’s budget – hugely consequential for the United States and of importance to Canada, too – represents a U-turn from the disastrous policies of the Bush administration and of the Republican political revolution that began decades ago. Imagine a U.S. budget that simultaneously offends rich farmers, everyone making $250,000 a […]
Read moreFar be it for me to suggest that the economics profession is or should be in crisis — introspection has never been the economist’s strong suit — so I won’t. But these far more qualified commentators do in a piece whose title says it all:Â The Financial Crisis and the Systemic Failure of Academic Economics. Read’em and weep as they […]
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 moreJust before Christmas, and lost between a trip to the mall and turkey with stuffing, David Laidler wrote a phenomenal piece on how we should be thinking strategically about a coordinated monetary and fiscal policy. I have reposted the key excerpt below because it should really be part of the mainstream discussion about how we address the growing crisis in […]
Read moreI really enjoyed a recent piece by Tom Palley “After the Bust: The Outlook for Macroeconomics and Macroeconomic Policy.”  He argues with great assurance that only progressive Post Keynesian analytics can explain the crisis, and that we won’t get out of it with a bit of Keynesian tweaking of the neo liberal paradigm. http://www.levy.org/vdoc.aspx?docid=1116 “Change†was the buzzword of the […]
Read moreThe most obvious cause for concern regarding the meltdown of retirement savings vehicles is that current and future retirees will face major shortfalls in their retirement incomes. The scale of the problem reinforces the long-standing argument of progressive economists that we need to expand our system of public pensions moving forward, and reduce reliance on fickle financial markets and on […]
Read moreInitial reports of this morning’s current account deficit emphasize that the fourth quarter of 2008 was the first such deficit since the second quarter of 1999. While correct, this historical comparison overlooks a crucial difference. Canada’s balance of investment income has always been negative. In the second quarter of 1999 and most previous quarters, Canada’s trade surplus was not large enough […]
Read moreOK this one is a bit nerdy, I admit it. I’ve been working on various popular education tools to go along with Economics for Everyone (my economics “textbook” for unionists and other activists), trying to make the material as accessible and entertaining as possible — and making it as easy as possible for local activists to sponsor their own courses. […]
Read moreThe main message in Statistics Canada’s release of 2009 investment intentions is that modestly higher public investment will partly offset sharply lower private investment. The glass-half-full perspective is that things would look far worse without the increase in public investment. The glass-half-empty perspective is that this increase will not be nearly enough to fully offset the loss of private investment. […]
Read moreAnti-trust lawyer David Balto, with the Center for American Progress, recently made the case against Ticketmaster’s proposed merger with LiveNation in testimony to the US Congress. The testimony also provides an excellent summary of Ticketmaster’s existing monopoly, some of which I excerpt below: Let’s be straightforward about one transparent fact: Ticketmaster is a monopolist and exercises that power to exploit […]
Read moreThe deal, unveiled yesterday by the Premiers of Nova Scotia and New Brunswick, is not actually called PEAR, but PARE: Partnership Agreement on Regulation and the Economy. Like TILMA, it was signed pursuant to Article 1800 of the existing Agreement on Internal Trade to further “liberalize trade, investment and workforce mobility.” Unlike TILMA, it does not establish an enforcement mechanism […]
Read moreObama’s speech to Congress laid out an excellent agenda: substantial investments in renewable electricity, healthcare reform without delay, increased education spending, enforced limits on carbon emissions and the end of Bush tax cuts for Americans making more than $250,000. However, there was one bug, which I fear the President may have caught on his recent visit to Canada: “creating tax-free universal […]
Read moreWhile the GM and Chrysler bailouts have prompted discussion of governments taking equity stakes in those companies, Business Week reports that Ford’s effort to restructure without government loans may make the United Auto Workers its largest shareholder. Henry Ford famously said, “Failure is simply the opportunity to begin again, this time more intelligently.†It seems unlikely that worker ownership is […]
Read moreI am a great admirer of Arthur Donner and Doug Peters who have kept the flame of Keynesian economics alive in Canada for many years and regularly provide good progressive commentary. But I’m a bit out of sympathy with their column in today’s Toronto Star. http://www.thestar.com/comment/article/590916 Their major argument is that Canada now faces structural deficits, and that tax increases […]
Read moreIt has to be the single most successful lobbying effort in a long time. And no one will notice or care. In Budget 2007, the Conservatives did something courageous and which tax experts had long called for : they proposed measures that would have denied firms a tax deduction on money borrowed in Canada, invested it abroad, and used to […]
Read moreJim’s posting of his excellent Globe column prompts me to review Canadian labour op-eds, and responses to them, on the “Buy America” controversy. The CAW’s Ken Lewenza was first out of the gate, writing in The Financial Post (Feb. 3) that Canada should mirror Buy America with its own “Buy Canadian” policy. My National Post op-ed (Feb. 5) argued that such […]
Read moreThe downturn in global trade is stunning — a sure sign that this is no garden-variety slowdown we are experiencing. And in Canada’s case, the cyclical downturn in trade lies on top of a deeper structural change: our increased reliance on resource exports, which produced (via Dutch Disease mechanisms) a corresponding shift of output and employment into non-tradeables, and a […]
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 moreConsumer prices fell by 0.1% between December 2008 and January 2009, reducing the annual inflation rate to 1.1%. Prince Edward Island joined the other two maritime provinces in having the dubious distinction of a negative inflation rate. This decline mainly reflected falling gasoline prices. Lower fuel costs were partly offset by higher mortgage-interest costs due to higher real-estate prices than […]
Read moreA year ago, in the 2008 BC Budget, a new tax was born. There was a hush over the House as its mother, the Finance Minister, prepared for delivery. The proud papa, the Premier, stood glowingly beside the new mom Carole and her baby tax, and basked in the glow of praise from climate scientists, environmentalists and policy wonks from […]
Read moreFaced with a nasty recession at its doorstep, the BC budget is uninspiring and underwhelming in its ambition. Overall there is little that actively plans for a recession, preferring instead a steady-as-she-goes budget, perhaps aimed at cultivating the image of responsible economic managers in a time of crisis. There are no tax cuts or drastic spending cuts, thankfully, but nor […]
Read moreAs has been widely reported, Ron Bloom from my union’s Pittsburgh headquarters will serve on President Obama’s Task Force on Autos. One might ask why a Steelworker is involved in crafting the automotive bailout. There are at least three reasons. First, during his previous career as a financier, Bloom developed significant personal expertise on the auto industry. Second, while working […]
Read moreIn today’s Vancouver Sun, Neils Veldhuis and Milagros Palacios act as yang to my yin on the oped page. Their pre-budget oped seems strangely distant from the day-to-day reality of a recession that is unfolding in BC and elsewhere. Their response could have been written two or five years ago: the solution is to cut taxes and spending, and all […]
Read moreAh. For the good old days. When a Budget Implementation bill lived up to its, err, billing. You know, stuff from the budget was in the bill. Other stuff was dealt with in other bills where stuff could be properly debated. Nowadays, you never know what you’re going to get when you open your Bill C-10 goody bag. Take the […]
Read moreThe Canadian Bankers’ Association must be happy. They’ve somehow managed to convince pundits south of the border, and even a few here who really ought to know better, that they’ve somehow been able to weather the economic and financial storm with absolutely no help from the federal government. The most recent evidence for this position is this editorial by Newsweek […]
Read moreThis afternoon’s news that the American stimulus bill passed without a single Republican vote in the US House of Representatives seems to validate Paul Krugman’s skepticism of bipartisanship. The Democratic effort to compromise with Republicans limited the amount of stimulus spending (as opposed to questionable tax cuts) in the package. If this constrained package proves insufficient, the Republicans will be able […]
Read moreI found this piece by David Harvey to be an absolutely brilliant and compelling analysis of just how difficult it will be to get out of this crisis, especially now that the global economy is visibly in free fall before our eyes. His argument is that there is no adequate political base in the US to sustain a solution radical […]
Read moreIt is so nice to see the backlash against Ticketmaster’s monopolistic practices. Two class action suits have been filed in Canada over the past weeks, and south of the border anti-trust alarm bells are ringing due to Ticketmaster’s proposed merger with Live Nation. Tickets sales have become something close to a natural monopoly, and as such should either have their […]
Read more(I prepared these as speaking notes for a workshop. They cover a lot of ground covered on this blog but they may be of interest.) The rapid descent of the global economy into what even the International Monetary Fund has begun to call a Depression will see very rapidly rising unemployment in Canada and around the world, likely to the […]
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