When Liberals formed British Columbia’s government in 2001, they had a commitment to manage provincial finances responsibly. The result: program cuts, reduced capital spending and lower costs of administration. Fiscal conservatism was the BC Liberal mantra and provincial debt reflected the style. In Gordon Campbell’s first term, debt rose by $577 million.
However, parsimony discourages existing friends and wins few new ones. As the end of the second Liberal term came into view, the commitment to fiscal conservatism altered. It didn’t merely soften; it dissolved.
The outflow of public cash was suddenly unrestrained. In the last four years, debt increased (Read more…)
This and that to end your weekend.
- PressProgress takes a look at the OECD’s long-term economic projections – which feature a combination of increasing inequality and slow growth across the developed world, with Canada do worse than almost anybody else on the inequality front unless we see a shift toward more progressive policies when it comes to unions, employment protections and fair taxes.
- Meanwhile, Derek Leahy discusses how much we have to lose by relying on the tar sands as our sole economic engine.
- David Cay Johnston points out that several of the largest forms of consumer (Read more…)
Assorted content to end your week.
- Simon Enoch discusses the costs of turning over a profitable system of public liquor stores to corporate control – as Brad Wall has finally admitted to wanting to do: A privatized liquor market is very likely to evolve into an ‘oligopoly’, where only a few corporations dominate and are able to exert monopoly-like power. Local, independent liquor retailers would likely find it difficult to compete. An oligopoly would have the supposed disadvantages of a monopoly, high prices and restricted supply, but lack the major advantage of public ownership, profits that flow in to (Read more…)
Jim Prentice and Wildrose champion Rob Anderson square off in Round 1, as members of the Calgary Chamber of Commerce look on. Actual scenes from Alberta political discourse may not appear exactly as illustrated. Judge Dave gives Round 1 to Mr. Prentice. Below: The real Mr. Prentice and the real Mr. Anderson.
Well, it’s hard to know for sure, but I’d say the first open policy scrap between Jim Prentice, Progressive Conservative Premier Apparent of Alberta, and the Wildrose Opposition yesterday morning went to Mr. Prentice.
Leastways, by most accounts Mr. Prentice managed to sound like a grownup when he (Read more…)
Miscellaneous material to start your week.
- David Atkins highlights how public policy and corporate strategy have both instead been directed toward squeezing every possible dime out of the public: The less noticed but potentially more consequential way that policymakers across the industrialized world set about accomplishing this goal was to push their middle classes to invest their wealth into assets, especially stocks and real estate, then use the levers of public policy to inflate the values of those assets in order to disguise the inevitable declines in wages. There was also a concerted effort to hide wage losses by (Read more…)
Board of trade president Sharon Horan wrote in her Telegram column last weekend that the unfunded pension liability will make up 85% of the provincial government’s debt not to long into the future. That will be up from the 75% of the public debt it makes today.
There you have proof that even the president of the largest business organization in the province does not understand the first thing about the state of the provincial government’s finances.
Public debt is a really basic idea that you have to know if you want to understand public finance. And you need to understand public finance if you want to have a useful say in how the government is running things. That’s what the folks at the board of trade want to do, one would expect.
And yet Horan got it wrong.
Not a mere technicality.
But dead wrong.
So if the . . . → Read More: The Sir Robert Bond Papers: Budget basics: debt #nlpoli
The Toronto Star just published an article I wrote in response to claims made by the Fraser Institute and the Toronto Sun that Ontario has a runaway debt problem worse than California’s.
The short version: I call BS. The slightly longer version: California has constraints, such as limits on the size of debt and difficulties in raising new taxes, that have severely hampered its ability to take on and manage debt. It has a smaller debt than Ontario on all measures but much worse credit standing. Ontario, on the other hand, still has a lot of flexibility to deal with (Read more…)
Today’s National Balance Sheet Accounts indicate that the amount of cash held by private non-financial corporations in Canada soared from $591 billion in the third quarter of 2013 to $626 billion in the fourth quarter of 2013. Corporate Canada’s accumulated stock of cash now exceeds the federal government’s accumulated deficit, which was $612 billion at the end of 2013.
Corporate Canada’s cash stash had been on track to exceed $600 billion at the start of 2013, but Statistics Canada narrowed its definition of “total currency and deposits.” Even under the new definition, this hoard of dead money surpassed (Read more…)
Numbers season is over but good inequality data is still missing. January sees us regularly bombarded with a whole range of economic statistics about the previous year. GDP growth: likely 1.7%, low but looking brighter for next year. Unemployment: 7.2%, low but lots of workers leaving the job market altogether as the employment rate stagnates. Inflation: 1.2%, low but deflation risks under control. “Low, but” is the theme of the year for the average Canadian. For the super-wealthy, however, the story is quite different. Indeed, if Canada had an official Luxury Index or reliable data on inequality, (Read more…)
Yesterday, I gave a pretty harsh critique on the self contradicting core conservative talking point of cutting debt and taxes to create jobs. What I argued was that if your vision is a dramatic reduction in the size and scope of government, then be honest about it and run on that. People will approve or they won’t, but don’t dress this up as being able to magically reduce the debt, cut taxation, and increase jobs simultaneously as if there are not contradictory trade offs to each of these.
So what about the left? Is the left similarly about a (Read more…)
“Privatizing gains and socializing losses” could be the motto for the neoliberal era. Alongside this and “there is no alternative”, few slogans better capture the ideology that has been so successfully diffused throughout the world over the past several decades.
Five years after latest financial crisis, this motto rings true as ever. To say that the losses stemming from the crisis were large is a heroic understatement; indeed, not only were they humongous, their exact size remains a tad fuzzy. Meanwhile, across the world in the aftermath of the crisis, stock markets have rebounded, wealth and income inequalities have grown (Read more…)
Virtually all incidences of modern Conservatism – Canada and the US, federally, state/provincially and municipally, from politician to politician – has a consistent central theme. Campaign planks comes and go, but this is the frame of the Conservative movement. It is also a lie, known by all who say it to be false, and at best a sort of spun half truth used for partisan gain. I’ll let the Ontario Tories’ big new Million Jobs Act talking point number one be the choice example of this theme: “Reduce debt and taxes to encourage employers to hire and to signal to (Read more…)
Imagine an eco-community of micro-homes designed as a first step out of homelessness.
Housing, easy to get into, if people care. Occupy Madison in Wisconsin has come up with an innovative first step of a solution [see below].
These 96 square foot homes are no long term solution, at all. But if you’re struggling to get some stability in your life and you’re homeless, it’s that much harder. Just having a roof over your head can give you warmth and a good night sleep to help you be more capable of doing everything else you need to improve your life.
This is the third and final post in what has become a three-part series on the puzzle of high profitability and low investment in the Canadian economy. In the first part, I looked at some data that shows the existence of the puzzle and explored a few of the factors that could be behind it. The follow-up post outlined broadly Keynesian and Marxian solutions aimed at raising investment: the former based on stimulating demand, the latter on eliminating overcapacity and increasing the relative profitability of productive capital. Here, I want to continue the thoughts that concluded the second part, (Read more…)
The following article was written on October 25. I wanted to read it over once more before publishing it, then got busy with other things and forgot about it. In the roughly six weeks that have passed since the writing of this article, the Bitcoin prices have gone from roughly $200 to over $700. There […]
Warning: A wonky, but thankfully short, post follows.
Yesterday, the Naked Capitalism blog reposted some recent research by OECD economist Eduardo Olaberria that looks at the effect of capital inflows on bubbles in assets, particularly housing. With so many other signs of a housing bubble forming in Canada, I decided to quickly see if the dangerous trends highlighted in this report are present in our economy today.
First, a quick recap. Several previous studies have found the same correlation between capital inflows and housing price booms; however, they merely used the current account balance (the measure of whether a (Read more…)
Debt and Deficit as Shock Therapy » CounterPunch: Tells the Facts, Names the Names.
When Naomi Klein published her ground-breaking book The Shock Doctrine (2007), which compellingly demonstrated how neoliberal policy makers take advantage of overwhelming crisis times to privatize public property and carry out austerity programs, most economists and media pundits scoffed at her arguments as overstating her case. Real world economic developments have since strongly reinforced her views.
Using the unnerving 2008 financial crash, the ensuing long recession and the recurring specter of debt default, the financial oligarchy and their proxies in the governments of core capitalist countries (Read more…)
Activist and art professor Max Haiven recently delivered a TED talk at TEDxNovaScotia titled “>The Debt of Creativity, in which he elaborates on the ideas he discussed in his essay Privatizing Creativity. It’s worth 15 minutes of your time to tune in.
Image: A Debtors’ Prison — William Hogarth.
Sometimes Question Period is downright funny. Witness this exchange on the provincial debt between Opposition Leader Danielle Smith and Premier Redford.*
Ms Smith: In Medicine Hat earlier this month the Premier said this about debt: it’s not debt; it’s hope. So let’s take some of the Premier’s other quotes and sub in “hope” for “debt” to see if that sentence makes sense. First: Alberta does not have hope, and we will not incur hope. Then there’s this: we cannot come out of the current fiscal situation with hope. And a PC campaign ad: Albertans want to know that (Read more…)
Indebted States of America by Maine artist Eric Leppanen is created with 169 of his own credit cards, collected over the past 23 years, adorned with the 50 U.S. state quarters and framed in gold leaf.
“It speaks to the marketing of ‘Big Banks’ to indebt Americans with bait and switch tactics and easy/free money,” explained Leppanen in an email. “The last 20 years of credit card marketing has fueled the economic boom, collapse and enslavement of millions and our own government is a shining example for all of us to follow.”
“After 16 years working for Bank (Read more…)
While this was written by Cicero in 44 BCE, after the assassination of Caesar and a year before Antony had Cicero murdered, the sentiment can be heard in today republicans–particularly those associated with the Tea Party. Any attempt at redistribution, according to Cicero, threatens the very foundation of the republic, which, he points out, was instituted to protect the sanctity of private property:
‘Those who wish to present themselves as populares, and for that reason attempt agrarian legislation so that landholders are driven from their dwellings, or who think that debtors ought to be excused from the money that (Read more…)
I’m not sure what to make of the hoopla going on in the US right now. I’m inclined to think it’s all just political theatre, as Gerald Celente calls it, designed to distract the people from the real issues – the central one being, who controls the government and the nation? Wall Street, the big […]
This comic does in one cartoon what the first chapter of Debt, the First 5000 Years does (pretty well) in one chapter. Alltop is a macro-humor generator.
This week’s TED Talk features Adam Baker, founder of ManVsDebt, a blog which focuses on a simple message: The first step to living a life of passion and purpose is to remove the barriers that hold you back. It sounds like good advice to me! * ManVsDebt.com