Where is the Canadian economy headed? The federal finance minister is on the road doing his pre-budget consultations. Expect Jim Flaherty to return with the same complacent views he proclaimed when he left Ottawa; the wording was drawn up for him months ago by the Prime Minister's Office. It reads: the recovery is on track and it is time to cut government spending.
The Harper script for the economy is all about politics and ideology. Liberals want to tax and spend. You can entrust your future to Stephen Harper; unlike Layton and Ignatieff, the Conservative leader will not raise taxes.
Something is seriously wrong with the economy, here and abroad. By now, the Canadian mainstream media should have recognized it. Instead, we get reassurances from business sources about "recovery" being just around the corner.
In Canada, the U.K., and the U.S., experts offer the same failed analysis (government failed), and governments propose the same discredited solutions (reduce deficits).
Writing in 1943 , the outstanding Polish economist Michael Kalecki affirmed that "even in a capitalist system, full employment may be secured by a government spending...." He wrote that "a solid majority of economists" shared this view.
His hypothesis was qualified by only two conditions. First, governments needed to have plans for full employment of "labour power." Second, governments had to be able to pay for needed imports of raw materials through exports. By this, he meant governments needed to have access to foreign currency. Securing domestic currency was no problem. Governments simply paid for employment programs by issuing government bonds.
American hegemony is the basic fact of global politics, recognized by all other powers. This has been the state of world affairs at least since the Bretton Woods conference of 1944 established the World Bank and the International Monetary Fund -- and put them in Washington, DC. The U.S. will to dominate its perceived enemies and intimidate its allies was confirmed by the two American nuclear bombing attacks on the civilian populations of Hiroshima and Nagasaki in 1945.
At the height of the 1999 World Trade Organization ministerial meeting in Seattle, just as the proceedings were being suffocated by tens of thousands of street protesters, Pascal Lamy, then the EU's trade commissioner and now WTO director general, pronounced that what the world was witnessing in Seattle was "a medieval process."
Within earshot of Monsieur Lamy, legions of baton-totting gladiatorial robocops smacked their shins in unison. The Seattle Trade and Convention Center, from which M. Lamy uttered those words, had become a hollow fortress as the riotous discontents outside drew a line, ate Roquefort, and whacked a few store fronts.
A major turn took place at the G20 finance ministers meeting in Busan, South Korea, two weeks ago, as the G20 reasserted deficit and spending reduction as its top priority, marking the final step in the (re)triumph of neoliberalism as global economy's modus operandi. Britain and Canada were the major proponents at the meeting of this deficit warrior approach to recovery, while China has cautioned against too rapid an end to stimulus efforts.