There is a new line of thinking over at the Bank of Canada: rather than raising interest rates to maintain the inflation target at 2%, the Bank is now stating that it might have to cut rates (beyond the 25 bp reduction today and 50 bp a couple weeks ago) to maintain the target. From a central bank that in […]
Read moreThe Bank of Canada was right to reduce its target interest rate this morning, but it did not go far enough. The labour movement has been proposing significantly lower interest rates for at least a year. Even the C. D. Howe Institute’s conservative Monetary Policy Council, which was calling for an interest rate hike only three months ago, proposed a […]
Read moreThey truly are a bunch of self-serving, greedy etc etc. … http://www.guardian.co.uk/business/2008/oct/17/executivesalaries-banking The Guardian October 17 2008 Top Wall Street bankers to receive $70bn pay deals Simon Bowers Financial workers at Wall Street’s top banks are to receive pay deals worth more than $70bn (£40.4bn), a substantial proportion of which is expected to be paid in bonuses, for their work […]
Read moreFurther to Toby’s excellent post on Iceland. Here are some extracts from OECD Country Reviews – courtesy of Roland Schneider of TUAC – which show gross disregard for the risks as they were building. Economic Survey of Iceland 2006 Published on 9 August 2006 Chapter 1: Policy challenges in sustaining improved economic performance Iceland’s growth performance has considerably improved since […]
Read moreLast night when I was watching the US presidential debate on Newsworld, the ticker told a one-line story that the Conference Board of Canada’s latest forecast for 2008 economic growth has been lowered to 0.8%. It was a redemption or sorts because back in February I testified before the House Finance Committee with Glen Hodgson of the Conference Board. I […]
Read moreI was intrigued by what is happening in Iceland, so the following is a piece I’ve written on it. It has some introductory macro-economics in it, which I think it is good to keep in perspective as we consider the frantic attempts being made to prevent an economic depression. The economic and financial collapse of 2008 is shaping up to be […]
Read moreIn Tuesday’s CBC interview, Harper told Canadians that “there are probably some great buying opportunities out there†and specifically pointed to “oil stocks.†Since then, the Toronto Stock Exchange declined by 8% and its Energy Index fell by 14%. S&P/TSX Composite Index Tuesday’s Close = 9,829.55 Friday’s Close = 9,065.16 S&P/TSX Capped Energy Index Tuesday’s Close = 234.16 Friday’s Close […]
Read moreWhat irks me about the Harperites’ non-response to the economic crisis is their claim that they have responded by bringing in tax cuts, announced in the Economic and Fiscal Update almost a year ago, and perfectly timed to the occasion. There is an argument to be made for tax cuts as a fiscal stimulus, although I think they will do […]
Read moreToday’s apparently rosy Labour Force Survey should not distract policy-makers from serious problems in Canada’s labour market. So far in 2008, full-time employment is down and unemployment is up. Wanted: Full-Time Jobs Total employment rose by 107,000 in September, far exceeding the modest uptick that one might have expected from temporary hiring by Elections Canada. However, as Statistics Canada notes, […]
Read moreToday’s Parliamentary Budget Office (PBO) report provides the following estimates. Total Cost of the Afghanistan War (2001-02 to 2010-11): $18.1 billion Past Cost (2001-02 to 2007-08): $10.5 billion Future Cost (2008-09 to 2010-11): $7.7 billion These figures are incremental costs, “costs that would not have been incurred except for the operation. Alternatively put, these would be the total savings to […]
Read moreAs Andrew suggests, the largest of Harper’s promises for manufacturing could aggravate the manufacturing crisis by widening Canada’s largest trade deficit. Eliminating the few remaining tariffs on machinery and equipment imported from outside of North America would encourage purchases of foreign-made machinery and equipment instead of Canadian-made machinery and equipment. From January through July 2008, Canada’s trade in machinery and […]
Read moreDeficits. There. I said it. Are you afraid? You shouldn’t be. If, as I suggested in my previous post, monetary policy is proving ineffective and if fiscal policy needs to be a big part of the solution, then we must consider what for many has become the unthinkable. We must revisit our fear of deficits, that word — that state […]
Read moreThe Bank of Canada today announced what appeared to be a dramatic cut (witness the splashy headlines) in the target for the overnight rate — a 50 basis point reduction. Bank of Canada to the rescue? Think again. The move was greeted with yawns from the banking community, which lowered mortgage rates by a mere 25 basis points. I’m surprised […]
Read moreLettre ouverte de la part d’économistes canadiens à propos de la crise économique actuelle et la réponse du gouvernement qui s’impose La crise financière mondiale qui s’aggrave, la chute des prix des matières premières à l’échelle mondiale et le risque grandissant d’une récession mondiale dévoilent des faiblesses inquiétantes de l’économie canadienne. Le simple fait de nous en remettre à nos […]
Read moreThe Progressive Economics Forum’s open letter is now making the rounds. Signatories include four chairs of economics departments, two former Presidents of the Canadian Economics Association, a former federal Secretary of State (Finance), and a former Quebec Minister of Industry. Here’s the text and the 88 signatories: Open Letter from Canadian Economists on the Current Economic Crisis and the Appropriate […]
Read moreToday Stephen Harper announced that the Conservatives will support the hard hit manufacturing sector by “abolishing tariffs on a wide range of imported machinery and equipment.” There’s no question that higher rates of real investment in new plant and equipment are essential to a manufacturing recovery. That’s why manufacturing unions, the CLC and all parties on the Industry Commitee of […]
Read moreHere’s a piece from the CLC election web site: http://canadianlabour.ca/en/employment-insurance-and-election-what-will-happen-if-there-a-recession EI is a critically important program for Canadian workers, especially in tough times like we face today. Laid-off workers obviously need adequate benefits to support themselves and their families while they search for a new job. Recessions mean that more workers lose their jobs, and that they find it much […]
Read morehttp://canadianlabour.ca/en/working-families-demand-a-fundamental-change Working Families Demand a Fundamental Change 2008-10-06 15:59 A Statement on the Economic Crisis by Canadian Labour Congress President Ken Georgetti OTTAWA – Canadian working families will bear the brunt of a deep economic crisis caused by self-serving and arrogant corporate bosses, aided and abetted by complacent, and do-nothing governments. Our jobs and our pensions are at risk. Today, […]
Read moreThe Liberals claim, “Corporate tax cuts implemented by the previous Liberal government actually raised government revenues and helped balance our country’s budget after years of Conservative economic mismanagement.” The federal budget was balanced in 1997, but the Liberals did not cut corporate taxes until 2001. Chronology does not support the notion that corporate tax cuts helped to balance the budget. The […]
Read moreOf all the high-flyers and assorted fraudsters now coming down to earth, this one is just too rich and comical to pass by. Owen Lippert, now scandalized as the wholesale plagiarizer from Australian Prime Minister John Howard in a speech he wrote for Stephen Harper, was the former Director of the Law and Markets Project at the Fraser Institute before […]
Read moreStéphane Dion has branded Jack Layton an “old-style socialist†with a “job-killing†platform. The C. D. Howe Institute’s Finn Poschmann echoes this view, arguing that corporate tax cuts are needed to keep Canada internationally competitive. (The C. D. Howe Institute is financed and governed by corporate Canada.) Of course, corporate taxes are but one of many factors that influence competitiveness. […]
Read moreAn excellent piece by Mark Weisbrot of CEPR, whose colleague Dean Baker called the collapse of the housign bubble ahead of everyone else. http://www.cepr.net/index.php/publications/reports/the-united-states-and-the-world:-where-are-we-headed/ The United States and the World: Where Are We Headed? By Mark Weisbrot This paper was presented at the Alexandre de Gusmão Foundation and the International Relations Research Institute’s (IPRI) “Seminar on the United States” hosted […]
Read moreSome coverage has suggested that the NDP’s platform costing was based on excessively optimistic projections. The Globe and Mail reported, “Like the Liberals, the NDP is basing its fiscal plan on the Conservative government’s 2008 budget projected surpluses, which are more than six months old and are widely believed to be too rosy in light of the economic slowdown in […]
Read moreI’m pasting in below a listserv note from Frank Hoffer with the Bureau of Workers Activities at the International Labour Organization, followed by a piece from Walden Bello. In these days of fianncial meltdown I do think we need to remind ourselves that this crisis is indeed rooted in the fact that “financialization” temporarily bridged the gap between the need […]
Read moreI calculate that Canadian trusteed pension plans have probably lost about $50 Billion since the end of March due to falling share prices. RRSPs are probably down about  $30 Billion. As of March 31st 2008 (most recent data) 4.6 million Canadians belonged to trusteed pension plans, and 5.8 million belonged to employer pension plans of all kinds. Total assets of […]
Read moreA good op ed from the New York Times. I wonder why we are not discussing this issue here – the stock market meltdown combined with the growing difficulties of the real economy are going to have huge impacts on pension fund balances. http://www.nytimes.com/2008/09/27/opinion/27ghilarducci.html?_r=2&ref=opinion&pagewanted=print&oref=slogin&oref=slogin Op-Ed Contributor Save Pensions By TERESA GHILARDUCCI THE meltdown in the financial industry isn’t merely a […]
Read moreWith many economic pundits attacking Jack Layton’s proposed freeze on the corporate income tax rate at 2007 levels, it is worth noting that Layton has also proposed to extend the accelerated (two year) capital cost allowance on new investment in machinery and equipment. This latter measure is supported by the Canadian Manufacturers and Exporters, who heavily criticized the 2008 Budget […]
Read moreThe 110 page U.S. Emergency Economic Stabilization Act of 2008 is certainly better than Paulson’s original 3 page proposal, but it falls so far short of what is needed that I wonder whether it will do more harm than good.  Despite its growth in size, it is still little more than a bail-out-come-swap financing deal for the  financial sector. The question […]
Read moreJeffrey Simpson dismisses Jack Layton in today’s Globe and Mail, “How can voters take the NDP seriously? †The first substantive critique appears about halfway through the column: “the NDP has not provided any costing for their platform.†As has been widely reported yesterday and today, the NDP is releasing its costed platform tomorrow. Since the platform is not out yet, how […]
Read moreThe U.S. Bureau of Labor Statistics has just released a comparison of manufacturing output, employment, productivity, and unit labour costs in 16 different industrialized countries. Here’s the link: http://www.bls.gov/news.release/pdf/prod4.pdf This data confirms that Canada’s manufacturing industry is in the midst of a uniquely terrible crisis. Some commentators have suggested that the sharp decline in Canadian manufacturing is an inevitable and […]
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