Preliminary 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 moreThe IMF released the results of its Article IV consultation with Canada, giving us an outsider’s take on how well we are handling the global economic crisis. But it is hard to know what to take away if left to the mainstream press, when the business page headline in the Globe and Mail is “IMF dashes hope of short recession” […]
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 moreI cannot say that I have ever wanted to quote Thomas Friedman. He has been such a booster for globalization, full of breathless praise for capitalism. I confess, I have never read any of his books for precisely those reasons. Someone gave me The World is Flat once and I could not stomach it, although I did love Ed Leamer’s […]
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 moreNot deficit, with a small d, but Depression with a big one. By now, everyone has come around to accepting that we are in a recession. Even though we have not had the rule-of-thumb two quarters of negative growth, rising unemployment, collapsing housing starts, drops in retail sales and so forth all tell us we are in a recession. Technically […]
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 moreA guest post from Tom Walker: The economic case for shorter working time was made 100 years ago this August in Winnipeg by Sydney J. Chapman. It was the standard model accepted by the elite academic establishment – Alfred Marshall, A.C. Pigou, Lionel Robbins and J.R. Hicks cited it as authoritative. This was not some obscure “debate among scholars from […]
Read moreHaving dropped its overnight interest rate to 0.5%, the Bank of England also announced a package of quantitative easing, of some £75 to 150 billion worth: It will create £75bn and use it to buy government bonds (gilts) and corporate debt over the next three months to boost the flow of money in the economy. The Bank has been given […]
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 […]
Read moreNumbers 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 […]
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