By desperately clinging to the facade of a balanced budget, today’s Economic Statement rules out a meaningful stimulus package. The federal government optimistically assumes an economic slowdown rather than a sustained recession (it projects real GDP growth every year). To avoid the modest annual deficits that a slowdown would cause, the government proposes to reduce overall expenditures, sell public assets, […]
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 moreIt appears that, once again, “We are all Keynesians now.” Almost everyone agrees that the federal government needs to inject significant fiscal stimulus into the deteriorating Canadian economy. In particular, there now seems to be a consensus for more infrastructure investment. While accepting this prescription in theory, the federal Conservatives maintain that tomorrow will simply be a fiscal “update” and […]
Read moreThe following sign-on letter comes from PEF steering committee members Louis-Philippe Rochon and Mario Seccareccia, who challenge us to think differently about the role of deficits in fiscal policy. The Toronto Star’s Carol Goar recently published an article based on the letter. A NOTE ON DEFICITS AND FUNCTIONAL FINANCE EXPENDITURES Louis-Philippe Rochon, Associate Professor of economics, Laurentian University Mario Seccareccia, […]
Read moreThe CCPA released an Alternative EFU today by yours truly (with lots of helpful comments from other PEF bloggers!). It is available here. The EFU is a prelude to the feds’ own EFU to be released Thursday. I modeled four scenarios of economic downturn to see what the status quo deficits look like, as other analyses to date have not […]
Read moreIn Saturday’s Globe, Gordon Campbell ridiculously presented eliminating inter-provincial barriers as a response to the global financial crisis. Although Marc beat me to the punch in replying, I have a few further thoughts. Several months ago, TILMA boosters said that removing alleged barriers to labour mobility was particularly pressing given a “tight” labour market. Today, the same people say that […]
Read moreThis is very good news, given concerns that the economic crisis would push climate change off the table: Barack Obama and congressional leaders are preparing rapid legislation to cut US emissions that cause global warming and to kick-start a clean energy revolution. Two bills are to be introduced as soon as the President-elect takes office in January. One will provide […]
Read moreThe financial crisis and economic downturn have led to some silly ideas, namely, completing the Doha Round of trade talks at the WTO, and in Canada, a variant around eliminating inter-provincial trade barriers. BC Premier Gordon Campbell has pressed for the latter, in spite of scant evidence that any meaningful barriers actually exist (the perception, however, runs deep with the […]
Read moreMany have noted that central bank lowering of short-term interest rates is running up against its limits, and we are hearing calls for major fiscal stimulus, i.e. large deficits. In a normal world, this raises the spectre of the government having to sell bonds to the private sector to get the funds, which could actually increase long-term interest rates and […]
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 moreSeasonally-adjusted consumer prices fell by 0.5% between September and October. While less dramatic than the 1.0% drop in the US, the sudden drop in Canadian prices also raises the possibility of deflation. The annual inflation rate declined from 3.4% in September to 2.6% in October, well below the US rate of 3.7% in October. This pace could put Canada on […]
Read moreCanada now has a Parliamentary Budget Office to make budget projections for the Minister of Finance. This office in no small part owes its existence to the CCPA’s Alternative Federal Budget, which under Jim Stanford’s guidance, was the first and only voice to call the then-Liberal government on its excessively prudent (read: wrong) budget projections, and was so for years. […]
Read moreI’m just back from visiting family in England, and got to have a first-hand look at how the economic crisis is playing out on the other side of the Atlantic. Suffice it to say, it is the dominant story. Before we left, the Bank of England cut short-term interest rates by 1.5% and it was revealed that they had contemplated […]
Read more“I think there’s probably a lot of great buying opportunities emerging in the stock market as a consequence of all this panic.†– Prime Minister Stephen Harper, Oct 7, 2008, cited in the Globe from his CBC interview The TSX index closed that day at 9829.55 Today’s close was 7724.76. Thus, the TSX has dropped 21.4% since Harper issued his […]
Read moreSays that “Our government will proceed with legislation to modernize our competition and investment laws, implementing many of the recommendations of the Competition Policy Review Panel.” The key recommendation of the panel was that only very large foreign takeovers worth more than $1 Billion (vs $300 Million today) should be reviewed at all, and that the onus should not be […]
Read moreAllan Blakeney, Saskatchewan’s Premier from 1971 until 1982, just published his memoirs, An Honourable Calling. Book launches are scheduled in Regina (Nov. 25), Saskatoon (Nov. 27), Moose Jaw (Dec. 2) and Ottawa (Dec. 9). A few years ago, Blakeney had me pull together some facts and figures for his chapter on oil, so I was quite interested to read the […]
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 moreThere’s a lot of talk on the net and in the media right about how to “unite the left” post election, with Murray Dobbin, many folks at rabble.ca and a few others talking about the need for an immediate coalition of the opposition parties to defeat the Conservatives. The project of some immediate union of the supposed left of centre […]
Read moreThe conventional wisdom may be that political parties cannot successfully campaign against tax cuts. But the federal NDP recently achieved its second-best electoral result ever by running squarely against Harper’s corporate tax cuts. South of the border, the US Democrats just won a massive victory partly by campaigning against the Bush tax cuts. In public opinion polls, citizens often prefer better […]
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 moreThe Regina Leader-Post recently ran an editorial opposing my proposal for higher resource royalties. My response is printed in today’s edition: The Leader-Post’s October 28 editorial critiqued my suggestion that the government of Saskatchewan increase oil royalties. It emphasized volatile oil prices, the volume of oil production in Saskatchewan and competition with Alberta. In fact, all three issues strengthen the […]
Read moreI recently noted that, although the price of oil has fallen by half from its summer peak, it still approximately equals last year’s average. Last year was thought to be a time of very high oil prices. Beyond observing that most commodity prices are way down from their recent peaks, it is difficult to generalize because different commodities have followed […]
Read moreElection Conceals Deteriorating Labour Market The period covered by October’s Labour Force Survey included election day. Temporary hiring for the election increased public-sector employment by slightly more than private-sector employment declined. In particular, jobs disappeared in every goods-producing industry: manufacturing, construction, utilities, natural resources and agriculture. Since 2002, manufacturing employment fell by 350,000 largely because supply-side factors – rising energy […]
Read moreIt strikes me that progressive economists should talk less about the need for immediate fiscal stimulus, and more about the case for an extended period of public investment led growth. Of course, as we slide into recession, Canadian governments will likely shift from surpluses to deficits simply by not cutting spending as much as revenues fall in line with shrinking […]
Read moreHere’s a conundrum. Diane Finley was appointed as Minister of Human Resources and SKILLS Development, though the Minister she replaces was the Minister of Human Resources and SOCIAL Development. If you go to the web site for the Department of Human Resources and SOCIAL Development, you’ll find that the Minister is the Minister of Human Resources and SKILLS Development. http://www.hrsdc.gc.ca/en/corporate/ministers/index.shtml […]
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 moreThe CCPA released today a new study by myself and Toby Sanger on the distribution of BC’s carbon tax and recycling regime. I’ve probably leaked most of the findings in various blog posts in recent months, but the full meal deal is now available for download here. Toby and I modeled the carbon tax by quintile based on household survey […]
Read moreLast night NDP Opposition Leader Carole James delivered her own televised address to the province, following on the Premier’s underwhelming address last week. This was a much better effort from James, with the speech probably aimed square at tomorrow’s two by-elections in Vancouver. With the BC election is still seven months away, this tit-for-tat game could get quite interesting by […]
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