They used to tell me I was building a dream, and so I followed the mob,
When there was earth to plow, or guns to bear, I was always there right on the job.
They used to tell me I was building a dream, with peace and glory ahead,
Why should I be standing in line, just waiting for bread?
Once I built a railroad, I made it run, made it race against time.Once I built a railroad; now it's done. Brother, can you spare a dime?
Once I built a tower, up to the sun, brick, and rivet, and lime;
Once I built a tower, now it's done. Brother, can you spare a dime?
Once in khaki suits, gee we looked swell,
Full of that Yankee Doodly Dum,
Half a million boots went slogging through Hell,
And I was the kid with the drum!
Say, don't you remember, they called me Al; it was Al all the time.Why don't you remember, I'm your pal? Buddy, can you spare a dime?
Once in khaki suits, gee we looked swell,Full of that Yankee Doodly Dum,
Half a million boots went slogging through Hell,
And I was the kid with the drum!
Say, don't you remember, I'm your pal? Buddy, can you spare a dime
Say, don't you remember, they called me Al; it was Al all the time.
Showing posts with label Great Depression. Show all posts
Showing posts with label Great Depression. Show all posts
Tuesday, February 24, 2009
1930's Oscars
Did anyone else notice that this years Oscar's ceremony was a flashback to the 1930's. It contained a depression era set, sepia toned back drops of store front hoardings, complete with a 1930's vaudeville dance routine, straight out of a Fred Astaire movie. Yep they got the message, America is about to enter a depression. And with the overwhelming win of Slumdog Millionare, the message could not be clearer, don't worry be happy. All that was missing was Hugh Jackman singing; Brother can you spare a dime.
Saturday, December 20, 2008
Harper and Flaherty's Conversion
Ottawa faces up to reality of deficits Here is the real reason that Harper and Flaherty had their economic conversion on the road to Damascus.OTTAWA - Canada's parliamentary budget officer is publicly questioning the projected budget surpluses of the Conservative government's recent economic statement and is asking for evidence to back up the predictions.
Kevin Page asked Finance Deputy Minister Rob Wright to turn over details on the projected spending reductions in departments and asset sales that the government has said will generate $10 billion in savings over five years. These are seen as key to the maintenance of a federal surplus.
Page's letter, sent on Dec. 3, has now been posted on the budget office's website. It asks for a reply this week.
He also asked for economic data and assumptions used for the 2008 budget and recent economic statement. Finance refused to give the data for the 2008 budget even though the numbers are routinely turned over to Bay Street forecasters. The assumptions, key to estimating the impact of economic volatility, used to be published by previous governments.
In his economic statement, Finance Minister Jim Flaherty projected a budget surplus of $100 million for 2009-10 based on the sale of about $2 billion in assets that he didn't identify.
Page tabled his office's assessment of Flaherty's economic statement last week, but the report got lost in the storm of the political crisis sparked by the Liberal-NDP coalition's attempt to topple the Prime Minister Stephen Harper's Conservative minority.
Kevin Page asked Finance Deputy Minister Rob Wright to turn over details on the projected spending reductions in departments and asset sales that the government has said will generate $10 billion in savings over five years. These are seen as key to the maintenance of a federal surplus.
Page's letter, sent on Dec. 3, has now been posted on the budget office's website. It asks for a reply this week.
He also asked for economic data and assumptions used for the 2008 budget and recent economic statement. Finance refused to give the data for the 2008 budget even though the numbers are routinely turned over to Bay Street forecasters. The assumptions, key to estimating the impact of economic volatility, used to be published by previous governments.
In his economic statement, Finance Minister Jim Flaherty projected a budget surplus of $100 million for 2009-10 based on the sale of about $2 billion in assets that he didn't identify.
Page tabled his office's assessment of Flaherty's economic statement last week, but the report got lost in the storm of the political crisis sparked by the Liberal-NDP coalition's attempt to topple the Prime Minister Stephen Harper's Conservative minority.
But as usual they will use a red herring to distract us from their complete failure to address this crisis earlier. Just as they used the opposition coalition as a red herring to seize power in Ottawa.
Canada's banks are being set up.
Prime Minister Stephen Harper has misplayed the financial crisis from the start. The lack of political leadership in this country is staggering. Now Mr. Harper – who dictates lines to his Finance Minister – has finally woken up to the fact 2009 will be one grim year for the domestic economy. '10 doesn't look too hot either. Someone will wear responsibility for a deep recession. The Conservatives are skating hard as they prepare to pin this one on the banks. The politicians will claim the banks hoarded capital, and refused to lend, and that sent consumers and corporations over the cliff. It's nasty, it's cynical, it's destructive and it doesn't happen to be true. But that's clearly going to be Mr. Harper's line.
Prime Minister Stephen Harper has misplayed the financial crisis from the start. The lack of political leadership in this country is staggering. Now Mr. Harper – who dictates lines to his Finance Minister – has finally woken up to the fact 2009 will be one grim year for the domestic economy. '10 doesn't look too hot either. Someone will wear responsibility for a deep recession. The Conservatives are skating hard as they prepare to pin this one on the banks. The politicians will claim the banks hoarded capital, and refused to lend, and that sent consumers and corporations over the cliff. It's nasty, it's cynical, it's destructive and it doesn't happen to be true. But that's clearly going to be Mr. Harper's line.
And despite Flaherty threatening the banks, the Harpocrites have not addressed the increased service charges on credit cards the banks have made, the fact that interest on credit cards is as high as it was during the recession in the eighties, and that banks still charge usury rates on ATM fees.
Feeling the crunch
Rising card transaction fees may mean higher prices, retailers say
Rising card transaction fees may mean higher prices, retailers say
Suddenly the issue raised by the NDP is no longer pie in the sky. However unlike Stelmach, the NDP called for the elimination of ATM fees, not just a cap. And we need to see a reduction in usury interest on credit cards. Banks loaning millions to capitalist enterprizes will have less effect than reducing /eliminating service charges, reducing credit card interest and eliminating ATM fees.
New Brunswick Senator Pierrette Ringuette is calling for a federal probe and stronger regulations on fees charged by credit card companies .Canadians hold 64.1 million credit cards, and 80 per cent of them are issued by the two main players in the industry, Visa and MasterCard. Consumers already pay an average of over 24 per cent interest.Visa and MasterCard have about 80 per cent of the national credit card market. Credit card companies are, therefore, extremely wealthy and powerful. Is this a 'collusion' situation because of this 'quasi monopoly' situation?" Ringuette also raised the concern felt by business and retail lobby groups that rates for debit card transactions could increase. There has been concern that the Interac Association, the non-profit group which administers debit and direct payment, could change to a "for-profit" organization. If this happens, the retail council is concerned that the private corporation could be purchased by the credit card companies and therefore create an even greater monopoly over plastic in Canada.
The Canadian Imperial Bank of Commerce said it would tighten credit card lending through 2009, as it announced its fourth-quarter profit fell by 50 per cent from the same quarter in 2007 — mainly because of higher credit card delinquencies. Some banks have also raised credit card interest rates by five percentage points for customers who are late with their payments. Art Thornton, a bankruptcy trustee in Ottawa, says the changes will mean more business for him."It's going to increase the interest rates noticeably to people who can ill-afford to pay, and it's going to render them — in many cases — insolvent."
And this NOT the issue that Flaherty or Mark Carney are addressing when they challenge the banks to free up credit after bailing them out and reducing the Bank of Canada rate.
Hyer Questions Gov't on Credit Card Processing Fees
Friday, 28 November 2008
Ottawa, ON -- Thunder Bay Superior North MP Bruce Hyer was up in Question Period on Thursday. Hyer was questioning the government over the cost of credit card processing fees.Here is the transcript of the exchange in the House of Commons:
Mr. Bruce Hyer (Thunder Bay—Superior North, NDP): Mr. Speaker, small businesses create a huge percentage of all the job growth in Canada. We should be helping them, not hurting them.The Canadian Federation of Independent Business is demanding that this government act before the big banks' next big cash grab. Our small businesses are facing a 10,000% increase in their Visa and MasterCard merchant fees. Is this fair?Does the government believe that it is not its problem, or that it can just not do anything about it? Which is it?
Hon. Diane Ablonczy (Minister of State (Small Business and Tourism), CPC): Mr. Speaker, the member raises an issue of real importance to small business. As he knows, the Canadian Federation of Independent Business has been speaking with the players about this issue. The fact of the matter is that the banks in this country are competitive. They are free to put forward products to all of the customers they have, including small business.The Minister of Finance has written to the banks about this issue asking them to deal with it. We are awaiting their responses momentarily, and we believe we can work on it together.
Canadian consumer-banking profit rose 20 percent to C$344 million from a year earlier as personal loans rose 21 percent and it added more mortgages. Commercial loans and credit-card revenue also rose from a year earlier.
Canadian Banking net income was $2,662 million, up 5% or $117 million from last year, reflecting solid volume growth across all businesses and effective cost management, partially offset by margin compression and increased provisions for credit losses. Net income was up 13% over last year, excluding the impacts of a $326 million ($269 million after-tax) gain related to the Visa Inc. restructuring and a $121 million ($79 million after-tax) credit card customer loyalty reward program liability charge recorded in the fourth quarter of 2007.
Canadian Banking's average assets grew by $21 billion or 14%, primarily in mortgages. There was also strong growth in personal revolving credit and other personal loans, as well as in business lending to both commercial and small business customers. Card revenues were a record $397 million in 2008, an increase of 8% from last year. International card revenues increased 11% due to strong growth in Peru, the Caribbean and Mexico. Canadian revenues were up 6% year over year, due mainly to higher transaction volumes. Credit fees of $579 million were $49 million or 9% higher than last year. There were higher acceptance fees in Canada, from both corporate and commercial customers.
A recovery in consumer spending will have to wait until Canadians pay down the excess credit card and mortgage debt accumulated in the past decade. Total personal debt nearly doubled between 2002 and the first half of 2008, when it stood at $1.2-trillion. The ratio of debt to disposable income rose from 98 per cent to 130 per cent over that period, while interest payments as a share of available income were virtually unchanged.
Canadians were besieged with advertising messages that promoted borrowing over those years. With credit so cheap and housing prices surging ahead, households took on a lot of risk. Now debt burdens look much too high.
We can take some comfort from the fact that the loans outstanding here are nowhere near as risky as mortgages in the United States. According to the Canadian Housing Observer, Canada has “a negligible subprime mortgage sector; [and] it is characterized by prudent underwriting.” And in Canada, mortgage insurance to protect the lender is mandatory for high-ratio loans.
But there is no insurance to protect the borrower when housing values decline or when someone in the family loses their job. If you ask people living in homeless shelters what sent them on a downward spiral, the common theme is a combination of losing their job, being unable to work because of injury or illness, and then losing their home.
This is a terrible price to pay for doing what was advertised as the smart thing to do.
Canadians were besieged with advertising messages that promoted borrowing over those years. With credit so cheap and housing prices surging ahead, households took on a lot of risk. Now debt burdens look much too high.
We can take some comfort from the fact that the loans outstanding here are nowhere near as risky as mortgages in the United States. According to the Canadian Housing Observer, Canada has “a negligible subprime mortgage sector; [and] it is characterized by prudent underwriting.” And in Canada, mortgage insurance to protect the lender is mandatory for high-ratio loans.
But there is no insurance to protect the borrower when housing values decline or when someone in the family loses their job. If you ask people living in homeless shelters what sent them on a downward spiral, the common theme is a combination of losing their job, being unable to work because of injury or illness, and then losing their home.
This is a terrible price to pay for doing what was advertised as the smart thing to do.
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Wednesday, December 10, 2008
Bank Rip Off
Gosh folks are surprised that Canada's Big Six banks are greedy and won't pass on the interest cut to you and me. Bank slashes key rate to 1958 level
Six Canadian Banks Fail to Match Central Bank Cut (Update6)
Big banks keep slice of deep rate cut
Big 6 lag behind central bank's lead
Bah humbug to banks’ greedy actions on rates
Why I am shocked, shocked I say, shocked that the media and pundits expected these greedy bastards to act like good corporate citizens. After all the last time Carney cut the interest rates, only a month ago, they didn't pass them on. And despite Flaherty and Harper bailing them out to the tune of $75 billion, the banks increased interest rates and service charges on credit cards and have refused to loan money to credit agencies like GMAC and Ford Credit. When you give these guys money with no strings attached they use it to increase their profit and to pay off their bad debts and criminal activities.Of course Mark Carney knows this he used to work for Goldman Sachs. Flaherty knows it too. When the bank and commerce committee met to review credit card and bank card user fees and interest rates they got the cone of silence from the bankers.Truly this is a case of throwing good money after bad.
And while they will claim they are looking after the interests of their shareholders remeber who that is , why you and me of course with our mutual funds, our CPP and other public pension funds who are institutional investors in the banks. In fact we own them.
Time to socialize the banks along with the auto industry under workers control, the only solution to this crisis of capitalism is socialization of capital.
SEE:
Back To The Fifties
UBScandal
Pension Rip Off
Credit Card Rip Off
Canada's Billion Dollar Rip Off
Bank Union
Service Charges
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Sunday, December 07, 2008
On The Dole
I love ths headline, speaking truth to power as they say, too often unemployment appears to have no apparent cause but it does of course, the bosses decide....Canadian employers wipe out 71000 jobs
Even though the bosses were given HR advice not to do this, they can't help themselves they have no plan to deal with the recession so they fall back on the old tried and true, lay off workers.
Fears of a million layoffs a month in corporate America
And as usual the cheery economic advisors to the bosses didn't expect this.
Canada lost 70600 jobs in November, about three times more than many economists had expected, Statistics Canada reported on Friday.
As strategist Ed Yardeni wrote, "the latest batch of economic indicators is so bad that we are either spiralling into a depression or we are within a few months of a V-shaped recovery."
Put Mr. Abramson, 42, firmly in the V-shaped camp. He doesn't believe a years-long slump is lurking in the shadows, although the markets have been trading that way.
"It's been a rough economy, which we underestimated," he says. But the market response reflects a "psychological meltdown" that has taken stocks down to ridiculous valuations.
"We've been fully invested for a period here, because we didn't believe this was going to go as far down versus valuation and economic reality as it has. We thought this was going to be a normal 20-per-cent correction." Oops.
So while Harper created a political crisis to avoid addressing the economic crisis, it slapped him in the face like a wet fish. Indeed can you say recession, the word he refuses to use. And he has no plan to address it, so he creates a political crisis to distract us from the bad news.
Harper shuts down Parliament while unemployment hits recession levels
We are in a recession, and the dark clouds of depression creep over the horizon.
Canada loses 70600 jobs in a month, most since '82
Ontario's crumbling manufacturing sector is a major reason why the 66000 of the 71000 jobs that disappeared in Canada in November did so in this province. ...
Yep the oil crash of '82 was when we had one of our worst recessions.
Good News — Conditions Resemble 1973-74!
The recession of 1974-75 was the worst since the 1930’s Great Depression. The 1973-74 bear market in anticipation of that recession was the worst bear market since that of the 1929-32 bear market (which led to the Great Depression). The mid-1970’s were indeed a miserable period.
And that was just last months unemployment figures the news continues to be bad across Canada.
GM to lay off 700 more workers in Oshawa
AbitibiBowater to shut mills, axe 1100 jobs
Closed mines, broken dreams in the town that nickel built
However we are not alone in this sudden realization that the economy is crashing, like Harper the other recession denier sits in the White House south of here.
US Loses 533000 Jobs in Biggest Drop Since 1974
The U.S. Labor Department reported Friday that last month, companies around the nation shed jobs at the fastest rate since the early 1970s, pushing the unemployment rate to its highest level in 15 years.
The figures suggest the year-old recession will approach or even exceed the 1981-1982 downturn in severity and support expectations that Federal Reserve officials will soon lower interest rates to levels not seen in a half century.
That was just the monthly unemployment rate it gets worse in the U.S. which does not have our style of EI as the unumber of unemployed or underemployed workers not on unemployment payments ballons.
Broader Unemployment Rate Hits 12.5%
One in Ten Americans Now Uses Food Stamps as Unemployment Continues to Rise
But still there are those economists who claim that the glass is half full, same guys that said there was no recession....
Unemployment hurts, but it's not a crisis yet
And some are down right optimistic......
Recession over by June?
And they are just plain wrong like they have been for the past year.
If recent downturns are any guide, it may be well into 2010 or perhaps even 2011 before unemployment peaks, which means the global economy should not count substantial U.S. consumer spending rebound any time soon. "The economy is now locked in a vicious downward spiral in which employment, incomes and spending are collapsing together," said Nigel Gault, chief U.S. economist at IHS Global Insight.
Along with the credit melt down unemployment is also a global problem.
OFF THE CHARTS A domino effect in the global work force
THE world recession is spreading, and the employment outlook is turning down almost everywhere.
Even in countries like China, the latest surveys of companies show they are reducing their work forces, providing more evidence that China cannot be the engine of the world economy when the traditional industrial powers suffer.
China fears a reverse migration
China's roaring industrial economy has been abruptly quieted by the effects of the global financial crisis. Rural provinces that supplied much of China's factory manpower are watching the beginnings of a wave of reverse migration that has the potential to shake the stability of the world's most populous nation.
Fast-rising unemployment has led to an unusual series of strikes and protests. Normally cautious government officials have offered quick concessions and talk openly of their worries about social unrest. Laid-off factory workers in Dongguan overturned patrol cars and clashed with police last Tuesday, and hundreds of taxis parked in front of a government office in nearby Chaozhou over the weekend, one of a series of driver protests.
Amid the global financial crisis, China's small and medium-sized enterprises, largely labor-intensive and vulnerable to fluctuations in domestic and external demand, are affected most. In the first half of 2008, 67,000 such companies, each with a business volume exceeding 5 million yuan, closed and laid off more than 20 million employees, said the National Development and Reform Commission. That figure doesn't include service industry firms or small companies with sales of less than 5 million yuan, as there are no authoritative figures available on those categories.
A HUNDRED per cent of the global economic growth next year will come from developing countries. This, according to Stuart E. Eizenstat, former US deputy treasury secretary, is the first time in history that developing countries will shoulder the full responsibility of pulling the global economy.
The European and US economic engines are not firing and therefore will not be able to pull the world economy along as has been done previously. Some economists, including David Carbon, chief economist at DBS Bank, believe that Asia is now more capable of standing on its own.Why then should the worker in a factory in China or Malaysia be concerned when the region, by most accounts, is in a much better economic situation than in the US and other more advanced nations? Why should economies in Asia and indeed other developing countries be concerned with rising unemployment in the US and Europe?The fact is that even though Asia is not as badly off as the US, Asia's growth is also slowing. In today's highly interconnected and globalised world, what happens in one part of the world is rapidly transmitted to the other side. Contagions spread faster. Thus, with the economic meltdown in the US and massive job losses, the demand for goods and services also falls. Offshore centres in India and in other parts of the world are also feeling the heat from the US financial and economic meltdown. The production and assembly line that snakes around the world, and in some cases making its way into remote villages, has also been affected.The unemployment numbers in Europe and other developed countries are also on the uptrend, with more joining the jobless ranks every day. This, according to some, could be the worst since the Great Depression of the 1930s
Ok folks lets do the math. Recession + Unemployment = Depression
US "Great Depression" has begun: Best of the Boards/Blogs
There's no mystery about what the government is trying to do. After the Black October crash, the government and the Bank of England got out their history books and started looking at what happened in the Great Depression. In September 1931, as unemployment reached three million, the national government slashed interest rates and abandoned the gold standard. The value of the pound fell by 25%, just as it has today. Interest rates fell from 6% to 2% - deja vu - and this led to a modest, export-led recovery. Unemployment fell marginally in 1935 as a recovery in the housing market, mainly in the south of England, boosted economic activity. The government is clearly trying to do the same today.
However, this isn't the 1930s. For one thing, there was a lot of spare capacity then in the economy, which is not the case today. We also had the Empire. Britain erected tariff walls against imports and used the colonies - yes, we still had them - to provide cheap food imports. The 1930s depression wasn't caused by consumer spending and debt, it was a classic crisis of ineffective demand.
Also: it didn't really work. Unemployment remained stubbornly high throughout the 1930s outside the south-east of England, and it was only rearmament, as the Second World War approached, that ended mass joblessness. We are in a very different situation today. We cannot seek salvation in another unsustainable boom and we certainly cannot afford to go to war.
And depressions lead to workers revolt.
Workers at Republic Windows continue sit-in after company closes
Sit Ins and plant occupations were popular in the 1930;s as well, and are far more effective than strikes, they can lead to the only obvious solution to the capitalist crisis; workers control of the means of production and the socializtion of capital.
SEE
Neo-Con Industrial Strategy.
Common Sense
Neo-Cons Have No New Ideas
Back To The Fifties
Here Come the Seventies
Wall Street Mantra
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Even though the bosses were given HR advice not to do this, they can't help themselves they have no plan to deal with the recession so they fall back on the old tried and true, lay off workers.
Fears of a million layoffs a month in corporate America
And as usual the cheery economic advisors to the bosses didn't expect this.
Canada lost 70600 jobs in November, about three times more than many economists had expected, Statistics Canada reported on Friday.
As strategist Ed Yardeni wrote, "the latest batch of economic indicators is so bad that we are either spiralling into a depression or we are within a few months of a V-shaped recovery."
Put Mr. Abramson, 42, firmly in the V-shaped camp. He doesn't believe a years-long slump is lurking in the shadows, although the markets have been trading that way.
"It's been a rough economy, which we underestimated," he says. But the market response reflects a "psychological meltdown" that has taken stocks down to ridiculous valuations.
"We've been fully invested for a period here, because we didn't believe this was going to go as far down versus valuation and economic reality as it has. We thought this was going to be a normal 20-per-cent correction." Oops.
So while Harper created a political crisis to avoid addressing the economic crisis, it slapped him in the face like a wet fish. Indeed can you say recession, the word he refuses to use. And he has no plan to address it, so he creates a political crisis to distract us from the bad news.
Harper shuts down Parliament while unemployment hits recession levels
We are in a recession, and the dark clouds of depression creep over the horizon.
Canada loses 70600 jobs in a month, most since '82
Ontario's crumbling manufacturing sector is a major reason why the 66000 of the 71000 jobs that disappeared in Canada in November did so in this province. ...
Yep the oil crash of '82 was when we had one of our worst recessions.
Good News — Conditions Resemble 1973-74!
The recession of 1974-75 was the worst since the 1930’s Great Depression. The 1973-74 bear market in anticipation of that recession was the worst bear market since that of the 1929-32 bear market (which led to the Great Depression). The mid-1970’s were indeed a miserable period.
And that was just last months unemployment figures the news continues to be bad across Canada.
GM to lay off 700 more workers in Oshawa
AbitibiBowater to shut mills, axe 1100 jobs
Closed mines, broken dreams in the town that nickel built
However we are not alone in this sudden realization that the economy is crashing, like Harper the other recession denier sits in the White House south of here.
US Loses 533000 Jobs in Biggest Drop Since 1974
The U.S. Labor Department reported Friday that last month, companies around the nation shed jobs at the fastest rate since the early 1970s, pushing the unemployment rate to its highest level in 15 years.
The figures suggest the year-old recession will approach or even exceed the 1981-1982 downturn in severity and support expectations that Federal Reserve officials will soon lower interest rates to levels not seen in a half century.
That was just the monthly unemployment rate it gets worse in the U.S. which does not have our style of EI as the unumber of unemployed or underemployed workers not on unemployment payments ballons.
Broader Unemployment Rate Hits 12.5%
One in Ten Americans Now Uses Food Stamps as Unemployment Continues to Rise
But still there are those economists who claim that the glass is half full, same guys that said there was no recession....
Unemployment hurts, but it's not a crisis yet
And some are down right optimistic......
Recession over by June?
And they are just plain wrong like they have been for the past year.
If recent downturns are any guide, it may be well into 2010 or perhaps even 2011 before unemployment peaks, which means the global economy should not count substantial U.S. consumer spending rebound any time soon. "The economy is now locked in a vicious downward spiral in which employment, incomes and spending are collapsing together," said Nigel Gault, chief U.S. economist at IHS Global Insight.
Along with the credit melt down unemployment is also a global problem.
OFF THE CHARTS A domino effect in the global work force
THE world recession is spreading, and the employment outlook is turning down almost everywhere.
Even in countries like China, the latest surveys of companies show they are reducing their work forces, providing more evidence that China cannot be the engine of the world economy when the traditional industrial powers suffer.
China fears a reverse migration
China's roaring industrial economy has been abruptly quieted by the effects of the global financial crisis. Rural provinces that supplied much of China's factory manpower are watching the beginnings of a wave of reverse migration that has the potential to shake the stability of the world's most populous nation.
Fast-rising unemployment has led to an unusual series of strikes and protests. Normally cautious government officials have offered quick concessions and talk openly of their worries about social unrest. Laid-off factory workers in Dongguan overturned patrol cars and clashed with police last Tuesday, and hundreds of taxis parked in front of a government office in nearby Chaozhou over the weekend, one of a series of driver protests.
Amid the global financial crisis, China's small and medium-sized enterprises, largely labor-intensive and vulnerable to fluctuations in domestic and external demand, are affected most. In the first half of 2008, 67,000 such companies, each with a business volume exceeding 5 million yuan, closed and laid off more than 20 million employees, said the National Development and Reform Commission. That figure doesn't include service industry firms or small companies with sales of less than 5 million yuan, as there are no authoritative figures available on those categories.
A HUNDRED per cent of the global economic growth next year will come from developing countries. This, according to Stuart E. Eizenstat, former US deputy treasury secretary, is the first time in history that developing countries will shoulder the full responsibility of pulling the global economy.
The European and US economic engines are not firing and therefore will not be able to pull the world economy along as has been done previously. Some economists, including David Carbon, chief economist at DBS Bank, believe that Asia is now more capable of standing on its own.Why then should the worker in a factory in China or Malaysia be concerned when the region, by most accounts, is in a much better economic situation than in the US and other more advanced nations? Why should economies in Asia and indeed other developing countries be concerned with rising unemployment in the US and Europe?The fact is that even though Asia is not as badly off as the US, Asia's growth is also slowing. In today's highly interconnected and globalised world, what happens in one part of the world is rapidly transmitted to the other side. Contagions spread faster. Thus, with the economic meltdown in the US and massive job losses, the demand for goods and services also falls. Offshore centres in India and in other parts of the world are also feeling the heat from the US financial and economic meltdown. The production and assembly line that snakes around the world, and in some cases making its way into remote villages, has also been affected.The unemployment numbers in Europe and other developed countries are also on the uptrend, with more joining the jobless ranks every day. This, according to some, could be the worst since the Great Depression of the 1930s
Ok folks lets do the math. Recession + Unemployment = Depression
US "Great Depression" has begun: Best of the Boards/Blogs
There's no mystery about what the government is trying to do. After the Black October crash, the government and the Bank of England got out their history books and started looking at what happened in the Great Depression. In September 1931, as unemployment reached three million, the national government slashed interest rates and abandoned the gold standard. The value of the pound fell by 25%, just as it has today. Interest rates fell from 6% to 2% - deja vu - and this led to a modest, export-led recovery. Unemployment fell marginally in 1935 as a recovery in the housing market, mainly in the south of England, boosted economic activity. The government is clearly trying to do the same today.
However, this isn't the 1930s. For one thing, there was a lot of spare capacity then in the economy, which is not the case today. We also had the Empire. Britain erected tariff walls against imports and used the colonies - yes, we still had them - to provide cheap food imports. The 1930s depression wasn't caused by consumer spending and debt, it was a classic crisis of ineffective demand.
Also: it didn't really work. Unemployment remained stubbornly high throughout the 1930s outside the south-east of England, and it was only rearmament, as the Second World War approached, that ended mass joblessness. We are in a very different situation today. We cannot seek salvation in another unsustainable boom and we certainly cannot afford to go to war.
And depressions lead to workers revolt.
Workers at Republic Windows continue sit-in after company closes
Sit Ins and plant occupations were popular in the 1930;s as well, and are far more effective than strikes, they can lead to the only obvious solution to the capitalist crisis; workers control of the means of production and the socializtion of capital.
SEE
Neo-Con Industrial Strategy.
Common Sense
Neo-Cons Have No New Ideas
Back To The Fifties
Here Come the Seventies
Wall Street Mantra
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Tuesday, November 25, 2008
Common Sense
While Harper, Flaherty and Farmer Ed continue to wear rose coloured blinders denying the obvious; that we are in a recession, you and I know better.Confidence falls
Reuters; Canwest News
Falling home prices and the worst bear market since the Great Depression combined to drive consumer confidence down further in November, the Conference Board of Canada said. The independent research association said confidence fell 2.9 points to 71, a level last reached in 1982 and 1990, respectively. Both were periods of recession. Consumers were gloomier about their personal financial situation than in October, with more than one-quarter saying their families were worse off than they were six months ago.
Confidence plunges on Prairies
Markus Ermisch, Sun Media
Tue, November 25, 2008
The Prairie provinces led the nation's tumble in consumer confidence this month, says the latest Conference Board of Canada consumer confidence index.
The Ottawa-based think tank reported yesterday Alberta, Saskatchewan and Manitoba collectively posted a 7.4-point drop in consumer confidence.
During the November survey, conducted between Nov. 6 and Nov. 13, 15.1% of the respondents said they were better of financially today than six months ago, a drop of 1.4% from October.
Meanwhile, 25.4% said they were worse off now, up 2.5% from October.
The Conference Board treats the Prairie provinces as one region and doesn't calculate individual results for each of the three provinces.
Alberta, however, which generates much of its income from natural resources, has also been impacted by collapsing commodity prices, which saw oil prices plunge from heights above US$145 a barrel this summer to less than $50 last week.
As a result of this unprecedented price contraction, economists at BMO Capital Markets forecast provincial GDP to grow 0.3% next year, down from the 2% growth estimated for 2008.
This means Alberta would be near the bottom of national growth chart.
The Prairie provinces led the nation's tumble in consumer confidence this month, says the latest Conference Board of Canada consumer confidence index.
The Ottawa-based think tank reported yesterday Alberta, Saskatchewan and Manitoba collectively posted a 7.4-point drop in consumer confidence.
During the November survey, conducted between Nov. 6 and Nov. 13, 15.1% of the respondents said they were better of financially today than six months ago, a drop of 1.4% from October.
Meanwhile, 25.4% said they were worse off now, up 2.5% from October.
The Conference Board treats the Prairie provinces as one region and doesn't calculate individual results for each of the three provinces.
Alberta, however, which generates much of its income from natural resources, has also been impacted by collapsing commodity prices, which saw oil prices plunge from heights above US$145 a barrel this summer to less than $50 last week.
As a result of this unprecedented price contraction, economists at BMO Capital Markets forecast provincial GDP to grow 0.3% next year, down from the 2% growth estimated for 2008.
This means Alberta would be near the bottom of national growth chart.
Gloom deepens among consumers as recession fears grow
OTTAWA — One of the last pillars of Canada's economic foundations may be crumbling as the latest survey shows consumer confidence eroding to a new quarter-century low.
The Conference Board's monthly poll of consumers found spreading gloom with the index drooping 2.9 points this month to 71, a depth not seen since the intense recession of the early 1980s.
"There's no doubt the level of the consumer confidence index is at recessionary levels and that's worrisome," said Paul Darby, an economist at the Ottawa think-tank.
"It's also now the case that that low sentiment has spread across the country - we've seen a major drop in consumer confidence in the Prairies as well."
The board's latest poll, conducted between Nov. 6 and Nov. 13, found the largest one-month decline on record for consumer sentiment in the Prairie region. Confidence also sagged in British Columbia, Ontario and Quebec, but edged up slightly in Atlantic Canada.
Nationally, only 9.7 per cent of those polled predicted there would be more jobs available in their communities in the next six months, the weakest employment expectation ever recorded by the Conference Board survey.
In the past few months, Canadians have seen the pillars of prosperity eroding or collapsing - exports, commodity prices, stock markets, housing, and most recently labour markets - but consumer spending, particularly for automobiles, has held up relatively well.
Darby believes the survey indicates Canadians may be getting ready to hold off on big purchases.
There is disagreement among economists about whether consumer confidence surveys accurately predict behaviour, but there may be more reality than usual in the latest survey, said TD Bank economist Don Drummond.
That's because the index dropped at a time when gasoline prices came sharply down, which he said was unusual.
"To have it fall when gasoline prices are falling may be more telling, because we've found there is a tight inverse relation between gas prices and consumer confidence," Drummond explained.
A major reason for the loss of confidence is the tumble in the stock market, which fell to barely half its summer peak, and growing fears that Canada is following the U.S. into bleak economic times.
In recent days, Prime Minister Stephen Harper, Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney have said Canada may be in or headed into a recession.
"The most recent private-sector forecasts suggest the strong possibility of a technical recession ... yes, I am surprised by this," Harper said from Peru on Sunday. Only two months ago, he had said the worst was over for the Canadian economy.
What has surprised many is the speed of the changes that have turned expectations on their head.
Oil, a mainstay of the Canadian economy, has gone from US$147 a barrel to $50 in a matter of months, forcing many oilsands producers to scale back projects in northern Alberta and taking billions of dollars out of the oil economy.
The North American automakers have gone from troubled to teetering on the brink of bankruptcy, with layoffs expected to intensify.
In his report, Darby found one hint of hope - 25.9 per cent of those polled said now is a good time to make a major purchase, slightly more than in October.
But he noted it was a minuscule change, and likely means only that people are anticipating bargains on purchases they make now.
The Conference Board poll claims a 95 per cent probability of its index reading - set at 100 in 2002 - being accurate within 2.2 points.
OTTAWA — One of the last pillars of Canada's economic foundations may be crumbling as the latest survey shows consumer confidence eroding to a new quarter-century low.
The Conference Board's monthly poll of consumers found spreading gloom with the index drooping 2.9 points this month to 71, a depth not seen since the intense recession of the early 1980s.
"There's no doubt the level of the consumer confidence index is at recessionary levels and that's worrisome," said Paul Darby, an economist at the Ottawa think-tank.
"It's also now the case that that low sentiment has spread across the country - we've seen a major drop in consumer confidence in the Prairies as well."
The board's latest poll, conducted between Nov. 6 and Nov. 13, found the largest one-month decline on record for consumer sentiment in the Prairie region. Confidence also sagged in British Columbia, Ontario and Quebec, but edged up slightly in Atlantic Canada.
Nationally, only 9.7 per cent of those polled predicted there would be more jobs available in their communities in the next six months, the weakest employment expectation ever recorded by the Conference Board survey.
In the past few months, Canadians have seen the pillars of prosperity eroding or collapsing - exports, commodity prices, stock markets, housing, and most recently labour markets - but consumer spending, particularly for automobiles, has held up relatively well.
Darby believes the survey indicates Canadians may be getting ready to hold off on big purchases.
There is disagreement among economists about whether consumer confidence surveys accurately predict behaviour, but there may be more reality than usual in the latest survey, said TD Bank economist Don Drummond.
That's because the index dropped at a time when gasoline prices came sharply down, which he said was unusual.
"To have it fall when gasoline prices are falling may be more telling, because we've found there is a tight inverse relation between gas prices and consumer confidence," Drummond explained.
A major reason for the loss of confidence is the tumble in the stock market, which fell to barely half its summer peak, and growing fears that Canada is following the U.S. into bleak economic times.
In recent days, Prime Minister Stephen Harper, Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney have said Canada may be in or headed into a recession.
"The most recent private-sector forecasts suggest the strong possibility of a technical recession ... yes, I am surprised by this," Harper said from Peru on Sunday. Only two months ago, he had said the worst was over for the Canadian economy.
What has surprised many is the speed of the changes that have turned expectations on their head.
Oil, a mainstay of the Canadian economy, has gone from US$147 a barrel to $50 in a matter of months, forcing many oilsands producers to scale back projects in northern Alberta and taking billions of dollars out of the oil economy.
The North American automakers have gone from troubled to teetering on the brink of bankruptcy, with layoffs expected to intensify.
In his report, Darby found one hint of hope - 25.9 per cent of those polled said now is a good time to make a major purchase, slightly more than in October.
But he noted it was a minuscule change, and likely means only that people are anticipating bargains on purchases they make now.
The Conference Board poll claims a 95 per cent probability of its index reading - set at 100 in 2002 - being accurate within 2.2 points.
SEE
tags
Saturday, November 22, 2008
Back To The Fifties
Deflation in Canada in the late 1950's led the Bank of Canada to create the floating Dollar. Now it's sinking.
Biggest inflation rate fall since 1959 raises deflation concerns
Economists fear deflation because consumers and businesses are more likely to delay purchases hoping that prices will fall further, slowing economic activity and business investments.
But more importantly, CIBC World Markets economist Avery Shenfeld said deflation often appears as the final nail in the coffin of a dying economy.
"Typically the only way you get deflation is if you've had a massive recession that has high unemployment rates and a lot of economic slack, so the conditions in which you get deflation are certainly not welcome," he explained.
One factor that may offset the potential for deflation is a recent drop in the value of the Canadian dollar. After starting the year near to parity with its American counterpart, the loonie, as the Canadian currency is popularly known, fell below 80 United States cents this week.
SEE:
Here Come the Seventies
Find blog posts, photos, events and more off-site about:
Bank of Canada, dollar, Canada, deflation, loonie, exchange-rates, 1961, Diefenbuck
Biggest inflation rate fall since 1959 raises deflation concerns
Economists fear deflation because consumers and businesses are more likely to delay purchases hoping that prices will fall further, slowing economic activity and business investments.
But more importantly, CIBC World Markets economist Avery Shenfeld said deflation often appears as the final nail in the coffin of a dying economy.
"Typically the only way you get deflation is if you've had a massive recession that has high unemployment rates and a lot of economic slack, so the conditions in which you get deflation are certainly not welcome," he explained.
One factor that may offset the potential for deflation is a recent drop in the value of the Canadian dollar. After starting the year near to parity with its American counterpart, the loonie, as the Canadian currency is popularly known, fell below 80 United States cents this week.
SEE:
Here Come the Seventies
Find blog posts, photos, events and more off-site about:
Bank of Canada, dollar, Canada, deflation, loonie, exchange-rates, 1961, Diefenbuck
Thursday, November 20, 2008
Here Come the Seventies
The U.S. cannot cut its interest rates much more or it will end up at zero.
US interest rate falls to 1 per cent
Which means that the U.S. is no longer facing infaltion but the very real recessionary spiral of deflation. The very thing that created the crisis of the Seventies.
Deflation now tops policy-makers' hit list
Globe and Mail, Canada - These are some of the disquieting signs that the once-distant spectre of deflation is looming larger on the horizon, now that economies around the world .
..Deflation: A Primer New York Times
Deflation is the new bogey word as crunch sends prices tumbling Times Online
Deflation worries send Dow below 8000 Washington Times
When your house is burning, there is no sense fretting over painting the fence. With the U.S. economy mired in what will likely be a recession of historic proportions—and an outright depression in some industries—it would be foolish to get too worked up over future inflation concerns. Oracle-of-the-moment Nouriel Roubini, in his Forbes.com column, forecast the following for next year:
“The advanced economies will face stag-deflation (stagnation/recession and deflation) rather than stagflation, as the slack in goods, labor and commodity markets will lead advanced economies’ inflation rates to become below 1% by 2009.”
Remember those wheelbarrows of cash Germans had to use to buy things after WWI watch for Americans to roll out the barrow.
Deflation is considered a problem in a modern economy because of the potential of a deflationary spiral and its association with the Great Depression, although not all episodes of deflation correspond to periods of poor economic growth historically.
And true to form the Austrians celebrate deflation as one of the great things about the Great Depression.
Now we get to the crux of the matter: the Great Depression. The assumption is that falling prices somehow caused the economy to crumble. In fact, it was the after-effects of the boom combined with massive government intervention that caused the depression. The only silver lining in the entire period of the 1930s was precisely the falling prices that made the dollar count for more. Falling prices (a falling cost of living) are what Murray Rothbard has described as the "great advantage" of recessions. If you can imagine the Great Depression without falling prices, you have conjured up an image that is far worse than the reality.
As Rothbard has said, "rather than a problem to be dreaded and combatted, falling prices through increased production is a wonderful long-run tendency of untrammelled capitalism. The trend of the Industrial Revolution in the West was falling prices, which spread an increased standard of living to every person; falling costs, which maintained general profitability of business; and stable monetary wage rates—which reflected steadily increasing real wages in terms of purchasing power. This is a process to be hailed and welcomed rather than to be stamped out."
Now with deflation rising on the horizon as Bush bails out the financial market this prediction from the CATO Institute holds a warning for the future.
The Bush Legacy: Deflation or Inflation?
by Steve H. Hanke
Steve H. Hanke is a Professor of Applied Economics at The Johns Hopkins University in Baltimore and a Senior Fellow at the Cato Institute.
Added to cato.org on September 24, 2008
Economists of the Austrian school of economics term this type of debt deflation a "secondary deflation". If the forces of a secondary deflation are strong enough, a central bank's liquidity injections are rendered ineffective by what amounts to private sector sterilization. When people expect prices to fall, their demand for cash increases and soaks up central bank liquidity injections. This phenomenon characterized Japan's economy during most of the 1990s.
But what if the Federal reserve--fearing a secondary deflation, as they feared (incorrectly) a mild deflation in late 2002--pushed the Fed funds rate lower (now it's 2%) and turned on the inflation switch by monetizing more debt? Given the growing mountain of government debt, there is virtually an unlimited potential. It's a scenario worth thinking about.
And that future is here and now.
And since we are being nostalgic here is the theme song to the CTV series Here Comes the Seventies....
Tag
sasset-backed commercial paper ,, seventies,deflation, mortgages, housing, bubble, US, economy, oil prices, sub-prime mortgage, Wall Street, crash, recession,Bernanke, Inflation, Staglation, Stock-Market, US, Federal-Reserve-Chairman, Oil, gold, commoditiesSmoot-Hawley, protectionism, tariffs, Herbert Hoover, U.S., U.S. economy, Canada, Great Depression, John McCain, market crash, free trade, Republicans, recession,
US interest rate falls to 1 per cent
Which means that the U.S. is no longer facing infaltion but the very real recessionary spiral of deflation. The very thing that created the crisis of the Seventies.
Deflation now tops policy-makers' hit list
Globe and Mail, Canada - These are some of the disquieting signs that the once-distant spectre of deflation is looming larger on the horizon, now that economies around the world .
..Deflation: A Primer New York Times
Deflation is the new bogey word as crunch sends prices tumbling Times Online
Deflation worries send Dow below 8000 Washington Times
When your house is burning, there is no sense fretting over painting the fence. With the U.S. economy mired in what will likely be a recession of historic proportions—and an outright depression in some industries—it would be foolish to get too worked up over future inflation concerns. Oracle-of-the-moment Nouriel Roubini, in his Forbes.com column, forecast the following for next year:
“The advanced economies will face stag-deflation (stagnation/recession and deflation) rather than stagflation, as the slack in goods, labor and commodity markets will lead advanced economies’ inflation rates to become below 1% by 2009.”
Remember those wheelbarrows of cash Germans had to use to buy things after WWI watch for Americans to roll out the barrow.
Deflation is considered a problem in a modern economy because of the potential of a deflationary spiral and its association with the Great Depression, although not all episodes of deflation correspond to periods of poor economic growth historically.
And true to form the Austrians celebrate deflation as one of the great things about the Great Depression.
Now we get to the crux of the matter: the Great Depression. The assumption is that falling prices somehow caused the economy to crumble. In fact, it was the after-effects of the boom combined with massive government intervention that caused the depression. The only silver lining in the entire period of the 1930s was precisely the falling prices that made the dollar count for more. Falling prices (a falling cost of living) are what Murray Rothbard has described as the "great advantage" of recessions. If you can imagine the Great Depression without falling prices, you have conjured up an image that is far worse than the reality.
As Rothbard has said, "rather than a problem to be dreaded and combatted, falling prices through increased production is a wonderful long-run tendency of untrammelled capitalism. The trend of the Industrial Revolution in the West was falling prices, which spread an increased standard of living to every person; falling costs, which maintained general profitability of business; and stable monetary wage rates—which reflected steadily increasing real wages in terms of purchasing power. This is a process to be hailed and welcomed rather than to be stamped out."
Now with deflation rising on the horizon as Bush bails out the financial market this prediction from the CATO Institute holds a warning for the future.
The Bush Legacy: Deflation or Inflation?
by Steve H. Hanke
Steve H. Hanke is a Professor of Applied Economics at The Johns Hopkins University in Baltimore and a Senior Fellow at the Cato Institute.
Added to cato.org on September 24, 2008
Economists of the Austrian school of economics term this type of debt deflation a "secondary deflation". If the forces of a secondary deflation are strong enough, a central bank's liquidity injections are rendered ineffective by what amounts to private sector sterilization. When people expect prices to fall, their demand for cash increases and soaks up central bank liquidity injections. This phenomenon characterized Japan's economy during most of the 1990s.
But what if the Federal reserve--fearing a secondary deflation, as they feared (incorrectly) a mild deflation in late 2002--pushed the Fed funds rate lower (now it's 2%) and turned on the inflation switch by monetizing more debt? Given the growing mountain of government debt, there is virtually an unlimited potential. It's a scenario worth thinking about.
And that future is here and now.
This week's cover story in The Economist makes it more or less official. Deflation, not inflation, is now the greatest concern for the world economy. Over the past year, producer prices have fallen throughout the advanced world; consumer prices have been falling for the last 6 months in France and Germany; in Japan wages have actually fallen 4 percent over the past year. Until the recent crisis prices were falling in Brazil; they continue to fall in China and Hong Kong; they will probably soon be falling in a number of other developing countries.
So far, none of these price declines looks anything like the massive deflation that accompanied the Great Depression. But the appearance of deflation as a widespread problem is disturbing, not only because of its immediate economic implications, but because until recently most economists - myself included - regarded sustained deflation as a fundamentally implausible prospect, something that should not be a concern.
And since we are being nostalgic here is the theme song to the CTV series Here Comes the Seventies....
Tag
sasset-backed commercial paper ,, seventies,deflation, mortgages, housing, bubble, US, economy, oil prices, sub-prime mortgage, Wall Street, crash, recession,Bernanke, Inflation, Staglation, Stock-Market, US, Federal-Reserve-Chairman, Oil, gold, commoditiesSmoot-Hawley, protectionism, tariffs, Herbert Hoover, U.S., U.S. economy, Canada, Great Depression, John McCain, market crash, free trade, Republicans, recession,
Saturday, November 15, 2008
Not So Good News
In another parallel from the Great Depression comes this article in the Toronto Star on the International Conference on the Capitalist Crisis that occurerd in 1933 after the election of FDR. The conference was a failure as America wrapped itself in the cloak of isolationism and protectionism.Experts say the efforts in London in 1933 collapsed in part on the spasms of isms – the tangled web of conceits driving the dying days of British imperialism, post-crash American capitalism, Stalin's iron-fisted communism and, in Germany, the newly installed fascism of Adolf Hitler. That, and a very intense hangover from the Great War. "The good news for today is that what the world faced then was so much worse. In terms of debt defaults, it was about three times the size of the crisis today, and almost all of it stemming from the bills owed from the First World War," said Albrecht Ritschl, a London School of Economics historian.
Good news? Ah excuse me did we miss the trillions of debt incurred in the failed wars in Afghanistan and Iraq? Debt that caused this crisis just as it created the post WWI crisis.
And we still the world political economy divided up amongst various styles of state capitalist regimes, including the US Military Industrial Complex.
Yes the parallels are striking, and all those right wing neo-cons and stock market pundits in the media keep saying they didn't see this coming. Because of course they had their rose coloured ideological blinders on.
SEE:
FDR and the origins of State Capitalism
Huh?
Last One Out Turn Off The Lights
Whiners and Losers
Super Bubble Burst
October Surprise Was The Market Crash
No Austrians In Foxholes
Pension Rip Off
CRASH
The Return Of Hawley—Smoot
Canadian Banks and The Great Depression
U.S. Economy Entering Twilight Zone
Neo-Liberal State Capitalism In Asia
State Capitalism in the USSR
China: The Truimph of State Capitalism
US vs China for Global Hegemony
Tags recession,
socialism,
capitalism,George W. Bush,asset-backed commercial paper ,, goldhomes, mortgages, FDR, bubble, US, economy, 1933, sub-prime mortgage, Wall Street, crash, recession,Bernanke, Inflation, Staglation, Stock-Market, US, Federal-Reserve-Chairman, Oil, gold, commoditiesSmoot-Hawley, protectionism, tariffs, Herbert Hoover, U.S., U.S. economy, Canada, Great Depression, market crash, free trade, Republicans, recession,
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