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Economic Crisis 200809 Verdict on a Failed Philosophy

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US stimulus package much bigger than Canada's, but the problem is huge ... Manufacturing Strategy and Economic Stimulus Package 'Buy Canada' Policy ... – PowerPoint PPT presentation

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Title: Economic Crisis 200809 Verdict on a Failed Philosophy


1
Economic Crisis 2008-09 Verdict on a Failed
Philosophy
2
What happened?
  • Too much faith in misguided beliefs
  • Government has no key role in shaping economic
    activity
  • Economic policy should focus on deregulation and
    tax cuts for the wealthy
  • Trade agreements should be about constraining
    governments
  • Loss of manufacturing is normal maturing of
    economy

3
These Ideas Encouraged Reckless Greed
  • Deregulation of U.S. mortgage business led to
    shaky loans
  • Deregulation of Wall Street spread toxic assets
    throughout the economy and the world
  • Canadian finances better regulated, but country
    still got hit by crisis

4
Wall Street Infects Main Street
  • With the busting of these bubbles, the result
    was
  • Homeowners in trouble
  • Producers scrambling for financing
  • Entire industries in jeopardy
  • Millions unemployed and
  • The whole world in a financial crisis

5
Dont blame workers
  • We didnt cause this crisis
  • Workers earnings remained flat 1998 to 2006
  • Top 100 Canadian CEOs doubled their income 1998
    to 2006
  • In 2005, Canadas top 100 CEOs earned 218 times
    what the average worker earned

6
Canadas Jobless Rate Skyrockets
7
490,000 lost manufacturing jobs
8
More than half of NorthAmerican Steel Capacity
idled
9
Understanding the Problem
  • Canadian Economy
  • Trade dependant resources and automobiles are
    key
  • 75 to 80 exports go to U.S.
  • Oil commodities bubble popped in 2008
  • Manufacturing already in decline
  • Near Term Outlook
  • U.S. economy in trouble
  • Housing sector struggling
  • Auto sector struggling
  • Canadian manufacturers have failed to invest in
    new plant, equipment

10
Comparing Canada U.S.
  • Job losses worse in US in 2008, but Canadas
    losses now accelerating
  • Less personal debt
  • Fewer bad mortgages
  • Tougher banking standards
  • Smaller housing market bubble
  • More Oil
  • Commodities boom
  • Outlook troubling
  • U.S. primary market for Canadian exports
  • More exposed to falling commodity prices
  • Home and Auto sales collapsed
  • Will foreign owned operations get investment or
    shut down notices?

11
Harper Govt Feeble In Response to Crisis
  • Some stimulus in January budget but less than
    called for by IMF, OECD
  • No Buy Canadian measures
  • Small improvements to Employment Insurance much
    less than needed

12
Obama on the right track
  • US stimulus package much bigger than Canadas,
    but the problem is huge
  • For the first time since 1945, US homeowners have
    more debt in their homes than equity.
  • 25 of all homes in the US have mortgages that
    exceed the value of the home.
  • Foreclosure rates are higher than they have been
    since the Great Depression.

13
Recovery Plan
Substantial, Strategic and Sustained
  • Ottawa should get moving on second wave of
    stimulus even before the first wave of money is
    spent
  • Combine with coherent manufacturing strategy
  • Buy Canadian procurement
  • Targeted incentives and subsidies
  • Better trade laws to support jobs

14
Recovery Plan
Substantial, Strategic and Sustained
  • Infrastructure/Green Jobs
  • Must rebuild the economy and save the planet at
    the same time
  • Study shows potential for 90,000 jobs in
    renewable energy in Ontario alone
  • Opportunity in construction, manufacturing,
    design, services

15
Recovery Plan
Substantial, Strategic and Sustained
  • Help the most vulnerable
  • Expand coverage and increase Employment Insurance
    payments
  • Raise Canada Pension Plan, Old Age Security
    cheques
  • Protect pensions, put workers first in corporate
    bankruptcies

16
Why This Will Work
  • Infrastructure spending will immediately inject
    money into the economy
  • Jobs will be created at home
  • As jobs are created here, the money will
    multiply through the economy
  • Gives money to those that will spend it
  • These investments will make our entire economy
    more competitive

17
It all fits together
18
What should we do now?
  • Demonstrations, petitions, letters to government
  • Support fellow workers fighting back
  • Participate in rallies organized by CLC,
    federations of labour, USW and other unions
  • Your ideas??
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