When the world plunged into recession in 2008, G20 leaders ostentatiously pledged not to repeat the errors of the 1930s. To hasten economic recovery, they would avoid protectionism and keep trade flowing. Canada's government has been among the loudest voices in this free trade chorus.
This is a gross misreading of actual history. World trade collapsed in the 1930s because of collapsing consumer demand, not protectionism; competitive tariffs were a response to that implosion, not its cause. For the same reason, world trade plunged 12 per cent last year, despite the G20 promises.
Parliament is back this week, and its focus this fall will be on what to do about the economy. The first order of business should be reducing unemployment, but the Conservatives are more interested in reducing the deficit.
Want to reduce the government deficit? Raise business investment? Improve the standard of living? Moving to full employment -- a job for everyone who wants one -- is the way to go. Putting more Canadians back to work will ensure the economy improves.
Is the world, including Canada, headed for the third Great Depression, as New York Times columnist Paul Krugman argues? Watching the results of the Toronto G8/G20 meetings was like hearing news that a giant comet is heading for earth and we are just waiting for impact. Those meetings of the world's largest and/or growing economies committed governments to massive deficit reduction in spite of the real concern that we are facing a the possibility of a so-called "double-dip" recession. That possibility is now a certainty.
Related rabble.ca story:
Are you ready for the Western world's economy to crash -- again?
More banks will go under. Many tens of thousands of people will again be thrown out of work. Billions of dollars in "investments" will disappear into thin air.
I believe it's not a question of "if" financial markets and the economy will crash again, but "when."
Giant banks are the most powerful institutions in in the world -- in many ways as powerful economically and politically as the biggest governments. Unfortunately, the banks frequently use their power in ways that damage the economy and hurt folks living around the world.
Two prominent research projects carried out in recent years paint a picture of a ruthless banking and financial sector powerful enough to dictate the nature of key parts of the world’s economy and challenge the strongest politicians.
Research carried out by three Swiss economists reveals the links and structure the giant financial institutions dominate and use to their advantage.