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 moreThe 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 moreWe 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 moreWilliam Robson, President of the C. D. Howe Institute, mounted a rear-guard defence of the conventional wisdom against Keynesian fiscal policy in yesterday’s Globe and Mail. He argues that we should leave the economy to central bankers and monetary policy instead of calling on governments to use fiscal policy. There are at least four problems with his op-ed: 1.) Far […]
Read morehttp://www.tuac.org/en/public/e-docs/00/00/03/91/document_doc.phtml This is a very useful discussion/policy paper from Pierre Habbard of the Trade Union Advisory Committee to the OECD. Executive summary 1. The latest phase of the financial crisis that broke out in the summer 2007 was marked by a dramatic turn in mid-September with the collapse of Wall Street, US insurance group AIG, and the subsequent asset destruction […]
Read moreLabour’s Plan was developed by the CLC in consultation with economists from our affiliates. It has been submitted to all of the party leaders and economic critics. The Summary is followed by elaboration of each of the five main points. (This document does not deal with financial regulation and international economic issues.) http://canadianlabour.ca/sites/clc/files/laboursplanfullEn.pdf
Read moreI highly recommend “The Credit Crunch: Housing Bubbles, Globalisation and the Worldwide Economic Crisis” by Graham Turner. “Graham Turner is one of only a handful of economists to understand the roots of the current financial crisis, its implications for all of us and crucially what should be done now. I strongly recommend you read this book.” —Larry Elliott, Guardian “A […]
Read moreThere is a lot of concern about there about the state of private pensions and private savings plans (RRSPs and the like). Having lost a quarter to a third of their value in the past year, those who anticipated a cozy retirement are now rethinking those plans. But the core problem is that asset values (houses, too) have grown at […]
Read moreIt is not often that Canada makes the news in the US. Here’s the story from the New York Times summarizing the latest employment data, the economic update and the resulting political crisis. If we use the factor of ten rule of thumb, our drop of 70,600 jobs compares poorly to 533,000 lost in the US (although I do find […]
Read moreThe Ontario economy fell off a cliff last month as the US meltdown intensfied the already virulent manufacturing and forest jobs crisis. An almost unprecedented 42,000 manufacturing jobs were lost in November in Ontario alone – that’s one in twenty of the total, and more than the total of manufacturing employment in either Oshawa or Windsor. And 20,000 jobs were […]
Read moreOver at Worthwhile Canadian Initiaitive, Stephen and Nick have been making the point that “Canada is not the United States, we are not in recession (although the odds that we will be soon are much better than even), and there’s no reason to rush into a program of public works”. To some extent, they are right, and that go-slow approach […]
Read moreThis political crisis is completely the fault of the Prime Minister. Having laid the groundwork for a solid economic update last week – by saying in Lima that he had learned the lessons of the Great Depression and that he would not rule out deficits – what was tabled was a plan that did nothing to address concerns about the […]
Read moreThe ever deepening global and national economic crisis has produced highly divergent views among mainstream economists on how radical a change is needed to orthodox fiscal and monetary policies with their focus on balanced budgets and low inflation. At one extreme, the recent Economic and Fiscal Statement indicates that the prevailing Department of Finance view is still that only very […]
Read moreA useful piece from the Caledon Institute – making the case for economic stimulus via targetted increases in and reforms to federal income support programs. http://www.caledoninst.org/Publications/PDF/727ENG%2Epdf
Read moreEven as Conservatives jettison some of the worst features of Thursday’s economic statement, they appeared on this morning’s TV news programs reiterating that their tax cuts are worth 2% of GDP – the amount of stimulus recommended by the International Monetary Fund. Almost a year ago, Marc began noting the dubiousness of casting tax cuts from the 2007 Economic Statement […]
Read moreCanadian Labour Congress Statement Why We Need a Coalition Government to Deal with the Economic Crisis. The Economic and Fiscal Update released by Finance Minister Flaherty on November 27, 2008 demonstrates that the Conservative government has no intention of seriously dealing with the global economic crisis and the prospect of fast rising unemployment. The recent G-20 Summit meeting called on […]
Read moreI wasn’t originally planning to write a longer analysis and critique of Flaherty’s fiscal and economic statement beyond our immediate response because, like most people, I expected it would at least show some reasonable recognition of the problem and at least the framework for a stimulus program (besides, I had young children to pick up from school, feed and put […]
Read morehttp://news.guelphmercury.com/Opinions/article/409306 Today’s economic update by Jim Flaherty must provide investment in jobs the canadian press November 27, 2008 Ken Georgetti Federal Finance Minister Jim Flaherty must use today’s economic update to become part of the solution to our ever deepening economic crisis. Governments, leading economists and even the International Monetary Fund agree that cutting interest rates alone will not save […]
Read moreMuch has been written on this blog about immediate responses to the crisis. We have analyzed proposed measures in depth and advocated for bold novel solutions. But it seems to me that we haven’t spent much time looking forward a little past the here and now. Last week, I was contacted by a Montreal-based journalist, Alex Roslin, who was looking […]
Read moreThere’s a great article in today’s Vancouver Sun hammering on the fact that all major mainstream economists failed to anticipate the economic crisis. Provocatively titled Economics 101: Everything you know is wrong, the article quotes James Galbraith’s indictment on the mainstream of the profession that originally appeared in a New York Times Magazine article: “There are thousands of economists. Most […]
Read moreThere’s been a fair bit of coverage recently about the big hit to defined benefit pension plans as a result of collapsing equity markets. That’s not a pretty sight, and many plan sponsors face serious short to medium term difficulties in financing their plans as funding deficits increase. But, most pension plan members can still count on getting the pension […]
Read moreInternational labour leaders including CLC President Ken Georgetti met with the heads of the IMF and World Bank, President Lula of Brazil and several other G-20 leaders before the summit to speak to the major trade union statement which called for immediate, co-ordinated action to avert a global jobs crisis, and fundamental reform of the de-regulated global financial system which got […]
Read moreThis statement is well worth reading, and may have some modest influence on the meetings. Brussels, 13 November (ITUC OnLine): Trade union leaders from the G20 countries will put forward a comprehensive plan to turn around the global economy, in meetings with world leaders in Washington DC on the eve of the financial crisis summit hosted by the US government […]
Read moreEric Helleiner and Stefano Pagliari have written an excellent briefing note on the politics of regulatory reform heading into the summit. In a nutshell, they argue that Franco-German initiatives to regulate some key elements of global finance – executive compensation rewarding extreme short termist, risky behaviour; off balance sheet activities; the fringe banking sector; over the counter derivatives – have […]
Read moreHere is a particularly gloomy but I think realistic assessment from the Financial Times economics editor Martin Wolf who has become just as gloomy as Roubini. I fear outright deflation beckons if the G-20 leaders don’t get their act together in just two weeks. http://www.ft.com/cms/s/0/6e23cdc8-a517-11dd-b4f5-000077b07658.html Preventing a global slump must be the priority By Martin Wolf Published: October 28 2008 […]
Read moreI debated Bill Watson from McGill on the economic crisis and the need for a “Bretton Woods II” for a half hour or so on the Sunday Edition, on CBC Radio. I found him more than a tad complacent myself – markets will bottom out and it would be a mistake to re-regulate neo liberal global capitalism and imperil all […]
Read moreHere’s the full version of the summary posted earlier – a much longer analytical section, and more detail on our suggested policy response. http://canadianlabour.ca/en/clc-response-economic-crisis-full-version CLC Response to the Economic Crisis Global capitalism: on the edge of the abyss Dramatic recent events have thrown into sharp relief some chronic and long-standing problems of our global and national economic system: an over-developed […]
Read morehttp://canadianlabour.ca/en/clc-response-economic-crisis-summary This call for government action was the result of deliberations at yesterday’s meeting of the CLC Executive Council, and reflects prior discussions among union economists. This is the summary. I’ll post the long version after it has bene translated and posted to the CLC web site. CLC Response to the Economic Crisis (SUMMARY) Global capitalism: on the edge of […]
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 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 more