Categories
Canada Government Tax

Ontario is no California when it comes to debt

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 debt. The “solutions” proposed along the Fraser Institute’s alarmism actually seek to create similar, harmful constraints in Ontario. “There is no alternative” becomes true only if we allow alternatives to be removed.

Read the full piece here.

Categories
Austerity Crisis Finance Political Eh-conomy Radio USA Workers

In and out of crisis with Sam Gindin

Today’s podcast is a feature interview with fellow political economist Sam Gindin. I interrogate Sam about the political economy of the present: the exit from the 2007 crisis, the role of states, austerity, the place of finance and the possibilities of resistance.

Sam Gindin is a left political economist with a long career. He was the longtime Research Director of the CAW and later held the Packer Visiting Chair in Social Justice at York University. Most recently, Sam authored The Making of Global Capitalism with Leo Panitch, a book that has gone on to win prestigious awards and spark important debates.

Categories
Canada Crisis

Transformations in profit and possibilities of resistance: A reply to Sam Gindin

Several weeks ago, I published a series of blog posts on profitability and investment in Canada since the financial crisis of 2007-8. These were republished as a single long article on Socialist Project and given the title, “Canada’s Profitability and Stagnation Puzzle”.  Since them, Sam Gindin has published a reply to my piece, “Puzzle or Misreading? Stagnation, Austerity and Left Politics”. Gindin challenges me on a number of fronts, most generally for misreading the current predicament in terms of a static formula that treats all capitalist crises ahistorically. This critique has ramifications for how Gindin sees not only my empirical account of present trends, but also my theoretical background and thoughts on strategies for resistance and alternatives.

Despite what appear to be many points of dispute, I think Gindin and I actually agree on a great many things, both in terms of the diagnosis of the current crisis and strategies for overcoming it. There are quibbles about statistics and wording, and I want to deal with a couple of these here, but I think we share much on broader theoretical and strategic matters. I want to primarily focus on the agreements behind our recent Socialist Project-facilitated interaction.

Categories
Austerity Canada Crisis

Austerity and the profitability puzzle: government gives profits a helping hand

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, namely that the Harper government’s preferred response to the puzzle has been neither demand stimulation nor industrial policy. Instead, it has been austerity – a strategy by no means accidental, but in fact designed to support the status quo of high profitability and low investment.

Austerity is not an isolated Canadian phenomenon nor is it a new one. The neoliberal era that began sometime in the 1970s has seen austerity in one form or another applied worldwide. Economic crises have especially provided governments with excuses to institute or continue austerity policies that would not have been difficult to institute otherwise. While Canada did not experience the latest economic crisis to the same extent as a number of other countries, it has seen a more moderate version of many of the same trends – such as slower growth and lower employment. The crisis was large enough to allow the Harper government to continue and deepen a tentative austerity regime. While Canada has not pursued austerity programs as spectacular as some, for example the UK or Spain, the Conservative government has, nevertheless, succeeded in substantially reducing the size of government, small cut by small cut. While Canadian austerity policies predate the crisis, the crisis has only helped to entrench them and further orient them towards propping up profitability.