#neoliberalism Under Flaherty the #cdnecon since 2006 has been a debt-fuelled financialized one only with little real production, productivity, or significantly increased employment to drive demand. Credit card debt has gone from $35.6 billion in February 2006 to $77.4 in February 2012, a staggering 117% increase.
Mortgage debt has gone from $672.5 billion to $1111.8 billion in February 2012, an eye-popping 65.3%. And these figures do not account for the past 12 month period, in which we already know personal debt has substantially increased even more. The personal debt to income ratio is 165% - which ought to be an embarrassment to all Canadians not just the so-called Finance Minister.
Why has Flaherty remained credible to the mainstream media? Because he's enabling them to make record profits, we know why he has to the financial community, especially since all his private sector economic consultants are from the banking sector. And of course it is these same consultants to whom the press turns for its stories. They're both inside the neoliberal bubble.
Yes, I'm repeating myself.
Showing posts with label Economic Policy. Show all posts
Showing posts with label Economic Policy. Show all posts
Wednesday, March 27, 2013
Monday, January 2, 2012
Cuts for Cash: Think about how absolutely appalling and hypocritical this tactic is
Cuts for cash: it can only spur mangers to propose even deeper cuts. Only a nasty neoliberal would use the profit motive to conduct what is supposed to be a rational, considered appraisal of departmental services and staffing needs in the Public Service. And how much is the per diem fee for the consulting firm? $90,000, as I recall. Think about how smugly hypocrtical this exercise really is too: who cut the GST by 2%, obviating a simple source of tax revenue, who blew the Liberal surplus, and who ran up the PS by 33,000 employees and wages by $5 billion since 2006?
So now that we know who's really responsible for this mess and who's going to pay for it - us - consider the real, economic context for the cuts for cash program: the fact, for instance, that even many neoclassical economists are now saying - with the EU on the brink of disaster and the world economy slipping - that this is not the moment for austerity measures but for initiating reasonable stimulus combined with moderate debt reduction. And, finally, ask yourself who benefits from a program that reduces the federal deficit? Certainly not ordinary Canadians, several thousands of whom will now be added to the ranks of the unemployed, and certainly not the general, industrial economy, which really requires job initiating strategies from government. That's right - only the financial sector with whom the Harper Regime, like the Obama and Cameron administrations, is in bed ideologically.
We can look forward, it would seem, to prolonging the recession in which we are still enmeshed despite the spin out there that we're not, and if the Canadian housing market explodes, as some outside Canada are predicting for 2012, we may have much more than a recession.
Yes, it might be the end of the world in 2012.
So now that we know who's really responsible for this mess and who's going to pay for it - us - consider the real, economic context for the cuts for cash program: the fact, for instance, that even many neoclassical economists are now saying - with the EU on the brink of disaster and the world economy slipping - that this is not the moment for austerity measures but for initiating reasonable stimulus combined with moderate debt reduction. And, finally, ask yourself who benefits from a program that reduces the federal deficit? Certainly not ordinary Canadians, several thousands of whom will now be added to the ranks of the unemployed, and certainly not the general, industrial economy, which really requires job initiating strategies from government. That's right - only the financial sector with whom the Harper Regime, like the Obama and Cameron administrations, is in bed ideologically.
We can look forward, it would seem, to prolonging the recession in which we are still enmeshed despite the spin out there that we're not, and if the Canadian housing market explodes, as some outside Canada are predicting for 2012, we may have much more than a recession.
Yes, it might be the end of the world in 2012.
Friday, November 11, 2011
Krugman: His Lucid Best on Euro Crisis and Its Implications
Legends of the Fail - NYTimes.com
Borrowing, if you must, in your own sovereign currency matters, and austerity never works, especially during a recession. Here are the facts, though I coud add the caveat if I were a neoclassical economist that those high interest rates for Spain and Italy are also, no matter what the currency, the result of lack of investor confidence in the economies of those countries. But I'm not, so I'll just say had the countries been able to manipulate fiscal and monetary policy with their own currencies instead of being locked into the Euro, which is controlled by the more wealthy EU countries - namely, Germany and France - there would be no investor confidence issue.
"... if you look around the world you see that the big determining factor for interest rates isn’t the level of government debt but whether a government borrows in its own currency. Japan is much more deeply in debt than Italy, but the interest rate on long-term Japanese bonds is only about 1 percent to Italy’s 7 percent. Britain’s fiscal prospects look worse than Spain’s, but Britain can borrow at just a bit over 2 percent, while Spain is paying almost 6 percent.
What has happened, it turns out, is that by going on the euro, Spain and Italy in effect reduced themselves to the status of third-world countries that have to borrow in someone else’s currency, with all the loss of flexibility that implies. In particular, since euro-area countries can’t print money even in an emergency, they’re subject to funding disruptions in a way that nations that kept their own currencies aren’t — and the result is what you see right now. America, which borrows in dollars, doesn’t have that problem.
The other thing you need to know is that in the face of the current crisis, austerity has been a failure everywhere it has been tried: no country with significant debts has managed to slash its way back into the good graces of the financial markets. For example, Ireland is the good boy of Europe, having responded to its debt problems with savage austerity that has driven its unemployment rate to 14 percent. Yet the interest rate on Irish bonds is still above 8 percent — worse than Italy."
See too my earlier posts:
Pathological Commitment to the Ideology of Austerity Brings Only Economic Stagnation
Fiscal Austerity: Does it Work?
Borrowing, if you must, in your own sovereign currency matters, and austerity never works, especially during a recession. Here are the facts, though I coud add the caveat if I were a neoclassical economist that those high interest rates for Spain and Italy are also, no matter what the currency, the result of lack of investor confidence in the economies of those countries. But I'm not, so I'll just say had the countries been able to manipulate fiscal and monetary policy with their own currencies instead of being locked into the Euro, which is controlled by the more wealthy EU countries - namely, Germany and France - there would be no investor confidence issue.
"... if you look around the world you see that the big determining factor for interest rates isn’t the level of government debt but whether a government borrows in its own currency. Japan is much more deeply in debt than Italy, but the interest rate on long-term Japanese bonds is only about 1 percent to Italy’s 7 percent. Britain’s fiscal prospects look worse than Spain’s, but Britain can borrow at just a bit over 2 percent, while Spain is paying almost 6 percent.
What has happened, it turns out, is that by going on the euro, Spain and Italy in effect reduced themselves to the status of third-world countries that have to borrow in someone else’s currency, with all the loss of flexibility that implies. In particular, since euro-area countries can’t print money even in an emergency, they’re subject to funding disruptions in a way that nations that kept their own currencies aren’t — and the result is what you see right now. America, which borrows in dollars, doesn’t have that problem.
The other thing you need to know is that in the face of the current crisis, austerity has been a failure everywhere it has been tried: no country with significant debts has managed to slash its way back into the good graces of the financial markets. For example, Ireland is the good boy of Europe, having responded to its debt problems with savage austerity that has driven its unemployment rate to 14 percent. Yet the interest rate on Irish bonds is still above 8 percent — worse than Italy."
See too my earlier posts:
Pathological Commitment to the Ideology of Austerity Brings Only Economic Stagnation
Fiscal Austerity: Does it Work?
Wednesday, October 26, 2011
Deconstructiing the Binary Opposition of Politics and Policy in the Harper Regime
Where good politics meets good policy :Dan Gardner's column in the citizen today. I can count on one finger "good policies" from the Harper Regime, and that finger shakes when the wind blows and twitches when I sleep. Yes, no question Harper would seem to choose politics over policy consistently, and when he would seem to choose policy at all, it's for political reasons, as in the ship building contracts through absentia. But when, on occasion, he would seemingly choose policy directly - unlike the ship building contracts - at the expense of politics, the policy is almost always not in the interest of all Canadians, but instead serves a narrow voter rich segment of the population, as is the case with the tough on crime bills, the Wheat Board abolition, and the slaying of the long-gun registry - which thus means that the policies are in reality politically motivated. And of course using surrogates, as in the gun registry business, is in itelf a political strategy to distance oneself from direct blowback should there be any. Sorry, Dan, such simple binary oppositions always fall apart. it doesn't matter whether the Harper policies are good or bad. It's politics - sometimes overt, sometimes subtle - all the time for the Harper Regime.
Wednesday, October 5, 2011
Bernake Would Seem to Get It. Does Flaherty?
http://goo.gl/CXd0Y Bernake would seem to get it: laying off government employees creates more unemployment. He also knows that any budget deficit should be constricted over a longer term, that cutting spending in the interests of deficit reduction too quickly will not help, and that the emphasis should be on fiscally stimulating the economy now to increase employment and thereby generate the economy and tax revenue in the process. Why doesn't Flaherty appear to get it with his steady as she goes stance instead of trying to get ahead of the curve? He's calling for leadership in Europe. How about a little serious, smart leadership right here in Canada? If commodities, which are the real engine of our economy, go sideways and if the European crisis spills over to North America, as it is inevitably will, it may be more than a slowdown that will occur. http://goo.gl/QcygU Fiscal Austerity: Does it Work?:
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