A 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 […]
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 morePEF member Salimah Valiani has written a report, released today by No One is Illegal, on the topic of temporary migrant workers in Canada, and a quiet but important shift in our immigration policies. The full report can be downloaded here and the abstract follows: This report elaborates the shift in immigration policy which began unfolding in Canada from the […]
Read moreBC’s recession and election together mean things are going to get nasty in the political realm. Already we seeing plenty of sneering commentary from our esteemed cabinet ministers. Consider this jibe from Colin Hansen, the Minister of Finance, in his annual address to the brethren of Sigma Chi: “I want you to think about one thing. Think about the opening […]
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 […]
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