Tax Cuts vs. Infrastructure
The Fraser Institute, Canadian Centre for Policy Alternatives, Informetrica, Bank of Montreal, and yours truly square off in today’s Toronto Star (page A17).
Read moreWho Spilled the Beans?
There was a noteworthy discrepancy in how our two national newspapers covered the $64-billion leak. The secondary headline printed in yesterday’s Globe and Mail began, “Finance Department’s deliberate leak . . .” While the story’s text identifies the leaker only as “a senior government official,” a pull-out quote in the print edition identified him or her as a “Finance Department official.” […]
Read moreWage-Price Deflationary Spiral
I don’t usually read (or cite) Sherry Cooper, chief economist for BMO Capital Markets, but in a recent article she was on the money: Layoffs and reductions in hours worked have been accelerating in recent months and cover firms in virtually every sector of the U.S. economy. The same has been true in Canada, but to a much lesser degree […]
Read moreWaltz with Bashir
I watched this movie last night and highly recommend it. I am often struck that criticism of Israeli military operations is more accepted in Israel than in North America. However, the movie won a Golden Globe and was just nominated for an Academy Award, which may add some welcome nuance to the dominant North American perspective.
Read moreNot very stimulating
An amended text from my speaking notes for the press conference releasing the 2009 Alternative Federal Budget. The press conference was covered live on Newsworld and Newsnet. In it we took an opportunity to comment on yesterday’s leak that the deficit will be $34 billion in 2009/10 and $30 billion in 2010/11. The good news is that after a year […]
Read moreAlternative Federal Budget 2009
I assume that Marc is stuck in a news conference, so here is the 2009 Alternative Federal Budget. The Canadian Centre for Policy Alternatives has also released some litmus tests for next week’s budget.
Read moreDash to Deflation
Today’s Consumer Price Index suggests that Canada is lunging toward deflation. The annual inflation rate plummeted to just 1.2% in December, 2.2% lower than only three months ago. If this pace continues, the national inflation rate will turn negative in the next few months. Two provinces, Nova Scotia and New Brunswick, already recorded negative inflation rates in December. Of course, […]
Read moreThe Redistributive Impacts of Employment Insurance
Human Resources and Social Development Canada commissioned a research study, “Income Redistribution Impacts of the EI Program” and changes thereto from Ross Finnie and Ian Irvine for the 2005 EI Monitoring and Assessment Report. I obtained a copy through an Access to Information Request some time back, and to my knowledge it has not (yet?) been posted to the HRSDC […]
Read moreIgnatieff’s Third Option?
Political watchers are waiting with baited breath to see whether Michael Ignatieff will acquiesce to Tuesday’s Conservative budget, to the applause of Bay Street Liberals, or whether he will defeat the budget and seize the opportunity to become Prime Minister of a progressive coalition government. It strikes me that there is a third possibility: he might propose explicit amendments to […]
Read moreVanier Institute’s report on family finances 2009
has just been published and is avalaible here. It largely confirms research conducted by PEF members on household wealth, indebtedness and income. The report highlights the state of financial precarity of many households, the gap between income and spending, the growing debtload and the important impact the “recession” (if we still want to call it that, given its deflationary driven […]
Read moreFinancial Crisis 2008: the music video
A regular reader of Relentlessly Progressive Economics who works at a financial research firm has made a music video about the financial crisis:
Read moreStudent Essay Contest 2009
The PEF’s 2009 Student Essay Contest Is Now Open USE YOUR ECONOMICS FOR SOCIAL JUSTICE! Tired of learning economics that seems more interested in justifying the status quo, than in explaining the real world – and changing it? Then join thousands of economics students around the world: put your economics to work in the cause of social change. PRIZES $1000: […]
Read moreA stronger economic union?
Everyone’s favourite non-issue came up again at last week’s First Minister’s meeting. The outcome of two amendments to the Agreement on Internal Trade was another bit of “progress”, I suppose (see backgrounder below). As usual, the release offers no details on actual trade barriers that are presumed to exist in Canada. With the long-standing margarine case settled as of last […]
Read moreFederal Budget Benchmarks
Impact on Jobs and the Economy Over 100,000 full-time jobs were lost in the last two months of 2008, confirming that Canada has followed the U.S. into a serious recession. Going into the Budget, the emerging consensus among economic forecasters (e.g., BMO and TD Bank) was that the Canadian economy would shrink by at least 1% in 2009, after almost […]
Read moreBank of Canada Wimps Out
The Bank of Canada did not cut its target interest rate enough this morning, leaving it a full percentage point above the US central bank rate. As I argued last week, the Bank of Canada should have matched the American Federal Reserve and cut to zero. Astonishingly, the Bank of Canada’s press release acknowledges that we are headed for deflation: […]
Read morePublic-Private Partnerships and the Budget
It’s noteworthy that the week before a budget that will supposedly accelerate infrastructure spending, the Finance Minister is announcing new management for PPP Canada. Budget 2007 dictated that provinces and municipalities seeking federal infrastructure funding “be required to demonstrate that the option of undertaking the project as a public-private partnership has been fully considered.” As I have pointed out, given the […]
Read more2008: Blog Year in Review
Last year was a momentous one for Relentlessly Progressive Economics. Of course, some of us continued using the blog to disseminate media commentary on behalf of our respective organizations. However, the Progressive Economics Forum (PEF) itself attracted media coverage a couple of times. Early in the year, The National Post and other CanWest papers cited it for documenting some striking similarities […]
Read moreMisaligned Priorities
So Industry Minister Tony Clement is now insisting that cuts to workers wages will be a condition of any bail-out package for the auto industry. This comes after an economic statement that was going to remove the right to strike and legislate public sector wages, and before a budget that could also include wage cuts or constraints for workers. I don’t recall constraints […]
Read moreA Job for the Parliamentary Budget Officer?
The Parliamentary Budget Office (PBO) was established in response to the systematic underestimation of federal budget surpluses. Its job was to provide independent estimates of the available surplus to keep Finance Canada honest ( “truth in budgeting” as the Conservatives said at the time). With the federal government headed into deficit, the PBO’s purpose is less clear. In theory, it […]
Read moreThe Battle for History II: Coyne’s Crisis
The Maclean’s cavalry has ridden over the hill to help Bill Robson defend the conventional wisdom against Keynesian fiscal policy. Here are four problems with Andrew Coyne’s “Special Report” (which I am having trouble finding online) in the latest edition of Maclean’s magazine: 1. Coyne presents as evidence of failed deficit spending a 1991 paper by Christina Romer, who is now […]
Read moreCutting to Zero
The Bank of Canada should announce a target interest rate of 0% on Tuesday. This move would match the action taken by the US Federal Reserve a month ago. Recent experience suggests that the chartered banks would not pass along the entire cut. But such a dramatic announcement by the Bank of Canada would place strong pressure on the chartered banks to noticeably […]
Read morePublic Infrastructure and Productivity
A well-timed release from StatsCan today that speaks for itself in terms of relevance to the current Budget debate: http://www.statcan.gc.ca/daily-quotidien/090114/dq090114a-eng.htm “Between 1962 and 2006, roughly one-half of the total growth in multifactor productivity in the private sector was the result of growth in public infrastructure. Public capital (the nation’s roads, bridges, sewer systems and water treatment systems) constitutes a vital input for […]
Read moreThe “Right” Stimulus Debate
We are now into full blown Budget consultation mode, with MPs of all parties going through a bit more than the usual pretence of listening before the actual Budget is finally put to bed by the government a few days hence. For once, even the Conservative inner circle seem a bit unsure of where to go. Below the closed (charmed) […]
Read moreThe Cost of Tax-Free Savings Accounts
Supporters of various American wars have sometimes proclaimed, “Freedom isn’t free.” This idiom could also be applied to Tax-Free Savings Accounts, which entail a cost in terms of lost federal and provincial revenues. When Budget 2008 unveiled TFSAs, several writers on this blog pointed out that their initially low fiscal cost would grow exponentially over time. At least one high-profile TFSA […]
Read moreThe Sustainable Development Paradox
Here is a note to Relentlessly Progressive Economics readers from Dr. Luis T. Gutierrez: The January 2009 issue of the E-Journal of “Solidarity, Sustainability, and Nonviolence” has been posted: The Sustainable Development Paradox As part of a series of articles on “dimensions of sustainable development,” the January 2009 issue shows the impossibility of integrating the social, economic, and political dimensions of sustainable development unless […]
Read moreConfessions of a Newspaper Economist
Declan picks up on Stephen’s suggestion that economists were too diffident to raise concerns about the real estate bubble: How to square the group of economists in the front pages of the paper offering a series of right wing prescriptions supported by neither fact nor theory with the economist unwilling to point out a housing bubble because it doesn’t fit […]
Read moreHow High Will the Unemployment Rate Go?
Another dismal jobs report for December, with 34,000 more jobs gone (71,000Â full-time losses) and the unemployment rate jumping a third of a point in a single month, has got everyone now wondering:Â How high will the unemployment rate go in this recession? The “consensus” view of the mainstream economics world is something like this: unemployment will climb to perhaps 8% […]
Read moreDanny Chavez vs. NAFTA
I have generally been underwhelmed by media coverage of AbitibiBowater’s prospective NAFTA challenge of Newfoundland and Labrador’s decision to reclaim natural resources that the company previously used to operate paper mills in the province. I watched a panel discussion on Mike Duffy Live (before his Senate appointment) that focussed entirely on NAFTA’s nondiscrimination provisions. But there is no suggestion that […]
Read moreObama Calls Out Krugman
Ezra Klein at American Prospect has already commented on some footage that I just saw on CNN. Paul Krugman marshalled his critique of Obama’s stimulus plan from his blog onto the op-ed page of today’s New York Times. A front-page story in the same newspaper suggests that Democratic legislators have been reading Krugman. Obama responded by throwing down the gauntlet for […]
Read moreThe Other Shoe Drops
Generally in recent months and particularly in November, there were pronounced job losses in the province of Ontario and the manufacturing sector. In December, the Ontario and manufacturing numbers did not change much. But job losses spread to other provinces and the construction sector. In effect, the only remaining bright spots in Canada’s labour market have been extinguished. Even adjusting […]
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