d_rawk Posted October 18, 2008 Report Share Posted October 18, 2008 Open Letter from Canadian Economists on the Current Economic Crisis and the Appropriate Government ResponseThe deepening global financial crisis, the decline in world commodity prices, and the growing possibility of global recession are exposing worrisome weaknesses in Canada’s economy. Complacent expressions of faith in our “fundamentals,†and other varieties of economic denial, will not protect Canadians from the coming storm.Canada’s Economic Fundamentals are Anything but StrongMacroeconomic performance has weakened dramatically since the current government came to power at the beginning of 2006. Economic growth has largely stalled. Productivity has declined. The recent expansion was largely propelled by high commodity prices and a housing bubble – both of which are now ending.Labour markets have weakened, and employment is poised to decline further as the slowdown takes hold. Some sectors have already been badly hit. Over 300,000 jobs in manufacturing have been lost. Yet less than 40% of unemployed workers qualify for Employment Insurance benefits.Excluding petroleum and minerals, our international trade performance has deteriorated. Incomes for corporations, governments, and some households have been inflated for a time by record global commodity prices. But over-reliance on resource extraction is not a sustainable basis for our future economic progress. Meanwhile, in large part as a consequence of this growing resource reliance, Canada has failed miserably to do its part in the urgent global effort to limit greenhouse gas emissions.Although Canadian financial institutions did not engage as aggressively in risky practices as their U.S. counterparts, the Bank of Canada has already had to step in to provide many billions of dollars in short-term liquidity. Credit conditions in Canada are becoming more uncertain, restricted, and costly, and this will inevitably constrain spending and output in the months ahead.Canadian households are more indebted than ever, with $1.25 of debt for every dollar of disposable income. Amid gloomy headlines, falling stock and housing prices, and precarious household finances, Canadians are starting to cut back on consumer spending.Many Canadians did not benefit much during the good times: poverty rates in Canada did not meaningfully decline and real wages have barely increased, even while corporate profits surged to all-time highs. But the prospect of recession now threatens all of us with hardship – whether we shared in the good times or not.Crisis Demands an Active Government ResponseThe general approach of Canadian economic policy in recent years has been to reduce the scope of government (through tax cuts, deregulation, and privatization), ratify the growing resource orientation of Canada’s economy, and squander the chance to use revenue from the resource boom to enhance long-run productivity, prosperity, and stability. Some politicians wish to further reduce the size and influence of the public sector.The dramatic events of recent weeks have destroyed the idea that markets are best left to their own, unregulated devices. The enormous costs of this complacency have been clearly demonstrated. Government and its institutions must now show leadership and play a more active role in stabilizing financial markets, stimulating real investment, and maintaining employment and incomes.The spreading downturn in both the financial and the real sides of the economy is likely to undermine spending and employment levels in many regions and sectors of Canada’s economy. Income support measures, employment insurance in particular, should be strengthened. In addition, public infrastructure projects, including those aimed at reducing Canada’s greenhouse gas emissions and expanding affordable housing, should be ramped up to maintain employment and production (as private-sector activity declines).The federal budget is narrowly balanced, and may slip into deficit (especially if real GDP begins to decline). The current government has pledged to prevent such a deficit at all costs, and this will mean significant cuts to public spending as the budget balance deteriorates. But that course of action would worsen the economic downturn and job losses. It is far better to maintain public programs to support employment and incomes, even at the cost of a cyclical deficit.The Bank of Canada must continue to support the financial industry with liquidity, and should reduce interest rates to stimulate borrowing. But the government must also explore other avenues (including the use of public institutions, like the Canada Mortgage and Housing Corporation, the Business Development Bank of Canada, Export Development Canada, and other conduits) to expand lending to households and businesses. At the same time, the financial industry must be re-regulated to prevent the unproductive speculative excesses that caused the current crisis.The global economy is heading into a challenging, dangerous period – perhaps the worst crisis since the 1930s. Canada cannot expect to be immune from those global developments. Economic history teaches us that government intervention is essential in times of crisis: both to stabilize markets and to shorten downturns with counter-cyclical measures.Signed,Abraham Rotstein, Professor Emeritus of Economics and Political Science, University of TorontoAllan Moscovitch, Professor, School of Social Work, Carleton UniversityAndré Joyal, Professeur associé, Département des sciences économiques, Université du Québec à Trois RivieresAndrew Biro, Associate Professor and Canada Research Chair, Department of Political Science, Acadia UniversityAndrew Jackson, National Director, Social and Economic Policy, Canadian Labour CongressAndrew Sharpe, Executive Director, Centre for the Study of Living StandardsArmine Yalnizyan, Senior Economist, Canadian Centre for Policy Alternatives.Arthur Donner Ph.D, Economic ConsultantBernard Élie, Professeur associé, Département des sciences économiques, Université du Québec à MontréalBrenda Spotton Visano, Professor, School of Public Policy and Administration, Economics, York UniversityBrian McLean, Professor, Department of Economics, Laurentian UniversityBruce Campbell, Executive Director, Canadian Centre for Policy AlternativesBruce Wise, Research Director, transportationcentre.comCécile Sabourin, Professor, Université du Québec en Abitibi-TémiscamingueCharlotte Yates, Professor of Political Science and Labour Studies, McMaster UniversityDaniel Drache, Professor of Political Science and Associate Director, Robarts Centre for Canadian Studies, York University.Donald Swartz, Associate Professor, School of Public Policy and Administration, Carleton UniversityEdward Shaffer, Professor Emeritus, Department of Economics, University of AlbertaEric Pineault, Professor, Department of Sociology, University of Québec at Montreal, Département des sciences économiquesErnie Lightman, Professor of Social Policy, Faculty of Social Work, University of Toronto,Fiona MacPhail, Associate Professor and Chair, Economics Department, University of Northern British ColumbiaFletcher Barager, Associate Head, Department of Economics, University of ManitobaGabriel Ste-Marie, Économiste, Chaire d’études socio-économiques de l’UQÀM et Cégep régional de Lanaudière à JolietteGordon Laxer, Professor of Political Economy and the Director, Parkland Institute University of AlbertaGreg Albo, Professor of Political Economy, York UniversityGustavo Indart, Economics Department, University of TorontoHarold Chorney, Professor of Political Economy and Public Policy Graduate program in Public Policy and Public Administration, Concordia UniversityHassan Bougrine, Department of Economics, Laurentian UniversityHeryk Flakierski, Professor Emeritus, Economics department, York UniversityHugh Armstrong, Professor, School of Social Work and Institute of Political Economy Carleton UniversityIan Hudson, Associate Professor, Department of Economics, University of ManitobaIglika Ivanova, Researcher, Canadian Centre for Policy Alternatives - BCJesse Vorst, Senior Scholar, Department of Economics, University of ManitobaJim Sentance, Chair, Department of Economics, University of Prince Edward IslandJim Stanford, Economist, CAWJoan McFarland, Professor of Economics, St.Thomas UniversityJoëlle J. Leclaire, Assistant Professor, Department of Economics and Finance Buffalo State College, SUNYJohn Brohman, Associate Professor, Department of Geography Simon Fraser UniversityJohn Calvert, Associate Professor, Simon Fraser University, Health Sciences FacultyJohn Loxley, University of Manitoba, Economics DepartmentJosée Lamoureux, Économiste, Service des relations du travail-Recherche Confédération des syndicats nationaux (CSN)Karen Grant, Associate Professor, Department of Sociology, University of ManitobaLars Osberg, Research Professor and Chair, Economics Department, Dalhousie UniversityLouis Lefeber, Professor of Economics (emeritus), York UniversityLouis-Phillipe Rochon, Department of Economics, Laurentian UniversityLynne Fernandez, Acting Director, Canadian Centre for Policy Alternatives-MbManfred Bienefeld, Professor, School of Public Policy and Administration, Carleton UniversityMarc Lavoie, Professor, Department of Economics, University of OttawaMarc Lee, Senior Economist, Canadian Centre for Policy Alternatives; Chair, Progressive Economics forumMarina Morrow, Assistant Professor, Faculty of Health Sciences Co-Director, Institute for Critical Studies in Gender and Health, Simon Fraser UniversityMario Seccareccia, Professor, Economics Department, University of OttawaMarjorie Griffin Cohen, Professor, Political Science/Women’s Studies Simon Fraser UniversityMartha MacDonald, Professor and Chair, Economics Department, Saint Mary’s UniversityMathieu Dufour, University of Massachusetts, Amherst, and Dalhousie University, EconomicsMaurice CAREL, Professeur titulaire d’économie rurale et développement Université LavalMel Watkins, Professor Emeritus of Economics, University of TorontoMichael Goldberg, Retired Research Director, Social Planning and Research Council of BCMichael A. Lebowitz, Professor Emeritus, Economics Department, Simon Fraser UniversityMike McCracken, President, Informetrica Ltd.Neil McLaughlin, Associate Professor, Sociology, McMaster UniversityPat Armstrong, Professor, Sociology, York UniversityPaul Bowles, Professor of Economics, University of Northern British ColumbiaPaul Leduc Browne, Professeur de Science Politique, Université du Québec en OutaouaisPaul Tulloch, Livingwork.ca, Labour EconomistPierre-André Julien, Professeur émérite, Institut de recherche sur les PME, Université du Québec à Trois-RivièresPierre Laliberté, Economiste, Fédération des travailleurs et travailleuses du QuébecPierre Paquette, Dept. Political Science and Economics, Royal militiary College of CanadaRadhika Desai, Professor, Department of Political Studies, University of ManitobaRicardo Grinspun, Associate Professor, Department of Economics, York UniversityRichard Lobdell, Professor of Economics, University of ManitobaRob Moir, Associate Professor of Economics, University of New Brunswick, Acting Chair of Social Science, President of the Atlantic Canada Economics Association.Robert Chernomas, Professor, Department of Economics University of ManitobaRod Hill, Professor of Economics, University of New BrunswickRodrigue Tremblay, Emeritus professor of economics, Université de Montréal,Salimah Valiani, Doctoral Candidate, Department of Sociology and Anthropology Carleton UniversitySeth Klein, Director, BC Office, Canadian Centre for Policy AlternativesShauna Butterwick, Department of Educational Studies, University of British ColumbiaSid Shniad, Research Director, Telecommunications Workers UnionSimon Black, PhD Candidate, City Institute, York UniversityStephen McBride, Professor & Director, Centre for Global Political Economy, Simon Fraser UniversitySylvie Morel, Department of Industrial Relations, Université LavalTerry Heaps, Associate Professor (retired), Dept of Economics, Simon Fraser UniversityHonourable Douglas D Peters PhD PC Retired, Former Chief Economist Toronto-Dominion Bank, and former Secretary of State (Finance)Theo Meijer, M.Ed. (Brit.Col.), Ph.D., Retired Senior Secondary Business EducatorThierry Roy, Department of Economics, Cégep de SherbrookeToby Sanger, Economist, Canadian Union of Public EmployeesTrevor Harrison, Chair, Department of Sociology, University of LethbridgeWilliam Rees, Professor, School of Community and Regional Planning University of British Columbia Link to comment Share on other sites More sharing options...
Thorgnor Posted October 18, 2008 Report Share Posted October 18, 2008 There's a lot of signatures from York University therefore this letter is Jewish and must be supported by all conservatives or else they will be considered anti-semitic... I find it to be right on, myself. Link to comment Share on other sites More sharing options...
phishtaper Posted October 18, 2008 Report Share Posted October 18, 2008 there are some major heavyweights on this list a lot have been around for 20 or 30 years or more. very impressive. this is an evaluation that deserves serious attention. Link to comment Share on other sites More sharing options...
Recommended Posts