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"From hindsight to foresight" by Mark Carney In an important address in Toronto in mid-December, Bank of Canada Governor Mark Carney offered this piercing analysis of the issues beyond monetary policy facing Canada and the global economy, at the onset of the current recession and the worldwide crisis in equity, capital and financial markets. "Back to the future: from Roosevelt to Obama" by Gil Troy As Barack Obama took office as the 44th president of the United States on January 20, comparisons abounded to the 32nd president, Franklin D. Roosevelt. The economic context was obvious — Obama inherits the worst economic crisis since FDR took office in 1933. Roosevelt’s first inaugural address, in which he famously declared, “We have nothing to fear but fear itself,” was an equally obvious standard of excellence. But beyond rhetorical benchmarks, how did Roosevelt rise to the occasion in the 20th century, and what historical lessons can Obama draw from FDR in the 21st century? Contributing Writer Gil Troy, author and presidential historian at McGill University, offers some reflections about then and now. "The Obama opportunity: agent of change in a time of crisis" by Thomas J. Courchene While attention has been directed to the magnitude of the economic challenge facing President Obama, often overlooked is the opportunity for the US president to utilize the near-trillion-dollar stimulus package to fundamentally transform aspects of America. This essay focuses on some of these transformations, and then addresses their implications for Canada’s economic prospects. Energy looks fine, manufacturing less so. This is because the energy-price volatility converts our currency into a petro-loonie which, in Dutch-Disease fashion, undermines Canadian manufacturing. In short, our currency area is too small to simultaneously accommodate prosperous energy and manufacturing sectors. How to enlarge our currency area must top the post-economic-crisis policy agenda. "Engaging Obama: American means, Canadian ends" by Irvin Studin In this article, Irvin Studin of Osgoode Hall Law School argues that the Obama presidency offers Canada the opportunity to advance significant strategic interests in the world, specifically by levering America’s still unrivalled global assets and capabilities (the “means”), while controlling and defining the “ends.” "A chance to jump-start labour productivity" by Todd Hirsch [summary not available] "Canadians see recession lasting into 2010; support deficits and infrastructure spending" by Nik Nanos In the run-up to the January 27 budget, we asked Nik Nanos of Nanos Research to probe the mood of the country on the deepening economic crisis and what steps governments should take to respond to it. Canadians are expecting a longer recession lasting into at least next year, rather than a shorter one ending this summer. They are prepared to accept deficit spending under the circumstances, and infrastructure spending is their preferred form of fiscal stimulus. "The pillars of Canada's economy: cracked, but not crumbling" by Jeremy Leonard The conventional wisdom that the Canadian and US economies are joined at the hip is no longer an accurate description of economic reality, not only because Canada has been spared the housing implosion that has decimated US consumers’ spending power, but also thanks to a global commodities boom that has buoyed domestic demand in recent years. Despite the recent gyrations of commodity prices, the economic rise of China and other large emergingmarket economies means that the short- and medium-term outlook for resource-rich countries like Canada is decidedly less grim than for our southern neighbours. "Lessons from the Great Depression: not the 1930s all over again" by William Watson The present economic crisis is widely compared with the Great Depression of the 1930s, a comparison that is both premature and wildly exaggerated, writes our former editor. “The easy invocation of the Great Depression, when the unemployment rate rose to I in 3 — at 1 in 19 we are light years from that — has mainly trivialized the travails of our parents and grandparents who lived through it.” One of the consequences of recent economic misadventures, he writes, “apart from the direct damage to output and jobs, is precisely that it so discredits free markets.” "Booms and busts: western Canada on the recessionary landscape" by Roger Gibbins, Jacques Marcil and Robert Roach Nowhere has the collapse of oil prices and the crash on the stock market been more actutely felt than in western Canada, home of Canada’s oil patch. Only last July, oil peaked at $148 a barrel, before plummeting to its December low of US$33. Energy stocks and income trusts, which drove the TSX to record high levels last year, have led its historic retreat since last September. The implications for the oil patch, and particularly the oil sands of Alberta, are obvious. We asked the authors, from the Canada West Foundation, to share their perspectives on the current situation and their outlook for recovery. "How American politicians and bankers built a financial debt house of cards" by Rodrigue Tremblay Why does the world economy seem to be caught every 60 some years in financial and banking turmoil that threatens to cause the real economy to collapse? Rodrigue Tremblay, professor emeritus of economics at the Université de Montréal, disentangles the web of political and financial causes that produced what he calls “casino-like financial capitalism” and resulted in the current economic crisis. He reviews the steps taken to deregulate the US financial sector since 1999, and he examines how the housing bubble and the development of new risky financial instruments combined to create “what might turn out to be the biggest financial mismanagement in history.” "The threat to retirement security" by Daniel Béland The impact of the current economic downturn varies from one layer of the Canadian retirement system to another. The return of federal deficits is potentially bad for Old Age Security and guaranteed income supplement, which are financed by general revenues. The downturn directly affects the Canada Pension Plan and the Quebec Pension Plan, which invest contribution money in equity. The present economic situation deepens the crisis facing occupational pensions. Finally, the financial downturn has a negative impact on RRSPs, which increases the pressure on the federal government to alter the rules governing them. Such developments underline the essential role of the state in the field of retirement security. "La crise financière et le déficit zéro : le Canada flirte avec les démons de son passé" by Marcelin Joanis A model of budgetary discipline for 10 years, Canada is now openly considering a return to deficits. But Ottawa should think twice about going down this road again, writes Marcelin Joanis, because that is how government finances got out of hand during another recession in the early 1980s. The author examines how the federal government let slip an “enviable position of structural surplus,” and recommends that it adopts a law on balanced budgets similar to the Quebec law. And since the “fragility of the provinces is Canada’s Achilles’ heel in terms of government finances,” he also suggests entrusting the equalization program to a body that is independent of the federal government, “in the interests of stability, predictability and basic prudence.” "Logiques d'expansion de la crise financière : en « V », en « U », ou en « L » ?" by Éric Pineault The nature and duration of the current economic crisis is the subject of all kinds of speculation. Some think there will be a recovery in a few months, as was the case after the recessions of the 1980s and 1990s. Others believe that the current situation is more serious and that, when the economy does recover, the levels of employment, economic growth and productivity will be permanently lower than previously. The latter is the opinion of Éric Pineault, who explains how this crisis differs from previous ones and calls for massive government investment in the order of 4 percent of GDP. This will also be a “vital opportunity to apply a ‘green shift’ to the economy and correct a system of growth that otherwise would bring about increasingly unacceptable social inequalities,” he concludes. "Les partis politiques québécois après les elections" by Michel C. Auger While the day after the March 2007 election the Liberals looked as if they had suffered a defeat, the December 2008 election gave them their third consecutive mandate — this time a majority — something that has not been seen since Maurice Duplessis. “The rise of the Quebec Liberal Party and of Jean Charest over the year preceding the election was nothing short of spectacular,” writes journalist Michel C. Auger. In this article, he analyzes this turnaround and assesses the prospects of the three main parties in the National Assembly. To him the December 8 election “heralds major changes in Quebec politics, even though it also means a return to a two-party system and thus some stability.” "Charest - the Teflon man closes the deal" by Antonia Maioni QUEBEC ELECTION Jean Charest won his bet in calling a snap Quebec election almost no one wanted. His gamble paid off when he graduated from minority to majority government in the December 8 election. In the process, he made history, becoming the first Quebec premier since Maurice Duplessis to win three consecutive terms in office. But his majority was smaller than predicted by the polls, a factor of the lowest turnout in modern times, and voter apathy due to Quebecers’ assumption the Liberals would easily win a big majority. In the end, the political crisis in Ottawa and Stephen Harper’s denunciations of “the separatist coalition” drove some voters to Pauline Marois and the PQ. She won a moral victory that secured her leadership, while Mario Dumont and the ADQ were marginalized and reduced to distant third-party status. "Le Québec a-t-il tourné le dos à la droite ?" by Paul Daniel Muller For some, the setback suffered by the ADQ in the 2008 provincial elections suggests that voters have turned their backs on the ideas associated with the right. The party’s detractors are already describing it as dead in the water. But don’t count your chickens before they hatch, cautions Paul Daniel Muller: there is still a demand in Quebec for reformist measures that place more emphasis on autonomy and initiative. Here Muller examines the assets the ADQ possesses to be the bearer of this agenda, as long as the party can explain its program better and revisits its positions on socio-cultural issues. "Sondages et résultats électoraux : 2008 marque une première" by Claire Durand According to Claire Durand, the December 8 election was a first for two reasons: voter turnout reached a record low, and support for the Parti Québécois turned out to be higher than predicted. In this article, she examines the discrepancy between the opinion polls and the final results, and attempts to pinpoint its causes. She analyzes the relationship between the participation rate and electoral choice, notably the assumption that sovereignists are less likely to vote. She concludes that the discrepancy between the polls and the vote can be explained by last-minute changes, and that it is the Liberal supporters that are less likely to vote. She recommends conducting polls later in election campaigns and taking probable voter turnout into consideration in forecasting voting intentions. "Le retour de Keynes" by Alain Noël [summary not available] |
