There's a move afoot in Canada to amend the national anthem, O Canada, to remove a non-gender-inclusive phrase. The words "all thy sons" should, it's proposed, give way to "all of us". Seems unobjectionable, though you'd be amazed how many traditionalists (i.e. the Tory government in Ottawa) want to stick with the old words.
There's another issue here, though. Once you start picking away at the words, the whole anthem emerges as a viper's nest of problems. Let's go through it line by line.
O Canada, our home and native land.
Not any more it isn't! Canada's a country of immigrants, so it's not really the "native land" for a large percentage of the population. And while we're at it, a lot of Canadians live abroad, so when they sing the anthem, it's not really their home, is it?
True patriot love, in all thy sons command.
We've already agreed that the sexism has to go, but what about that word "patriot"? Patriotism is famously "the last refuge of a scoundrel", and that's surely not what we want to say about ourselves, is it?
With glowing hearts we see thee rise, the true north strong and free.
Whaddaya mean, north? The most populous parts of Canada lie south of large chunks of the United States. (For example, Toronto lies to the south of Seattle, Portland and Minneapolis). In addition, Canada lies south of most of the parts of Europe from which its white settlers came, including the pioneering French and English.
From far and wide O Canada we stand on guard for thee.
Clearly non-inclusive of folks with disabilities who are unable to stand when the anthem is sung. The "stand on guard" part is anachronistically militaristic too, especially with Canada spending so little on its armed forces these days.
God keep our land glorious and free, O Canada we stand on guard for thee.
Who dragged the Deity into this?? Clearly not appropriate in this more "enlightened" day and age!
So where does all of that leave us? Let's put it back together.
O Canada, our favourite patch of land
Warm sentiments in all of us command
With glowing hearts we see thee rise, a very big country
From far and wide O Canada
We gather 'round for thee
Let's hope our land stays glorious and free
O Canada we gather 'round for thee!
Inspiring, no? Think I should have a go at the French language version?
Tuesday 30 September 2014
Friday 26 September 2014
Looking for inflation (in all the wrong places)
Bank of England Governor Mark Carney is warning that the day when the Bank starts raising interest rates is "getting closer". Well, duh. As my mother would have said, "so is Christmas", though there's the obvious difference that we know precisely when Christmas is going to arrive, whereas Carney is just being a tease. He's concerned that after more than half a decade of ultra-accommodative monetary policy, financial markets are becoming complacent and less risk-averse as they search for returns in a low-yield world. The same might be said to apply in real estate markets, in London and elsewhere.
If that's the case, then what's holding the BoE and other central banks back? As this article reporting a speech by Carney's new Deputy Governor makes clear, it's mostly the lack of any evidence that wage pressures are increasing. Fed Chair Janet Yellen has repeatedly made a similar point regarding the US. But why would anyone expect rising wage pressures? Unions have been forced on the defensive worldwide; labour laws have been amended in favour of employers; globalization means that corporations are constantly moving production from jurisdiction to jurisdiction in search of lower costs; firms are systematically replacing full-time jobs with part-time and contract positions. How are wages supposed to rise in these circumstances?
If the key drivers of wage trends were cyclical, then it would be appropriate for central banks to monitor labour markets closely and to warn of the need to tighten policy once signs emerged of wage cost pressures. As it is, all the evidence seems to suggest that what we are seeing is a sustained, secular fall in wages -- or, as it's increasingly commonly expressed, a long-term rise in income inequality. If this is the case, labour market trends are the wrong place for central bankers to focus on as they set monetary policy.
So where should they be looking instead? Here's a clue: when Carney made his statement-of-the-obvious, UK share prices promptly took a dive. For the last couple of years we have been living in a world in which asset prices (real estate as well as stocks) have been pushing ever higher, even though the vital signs of the world economy remain below par. As anyone who was watching aghast as the Greenspan era imploded could tell you, pumping money into the system creates an asset price bubble.
Are the central banks really going to make the same mistake again, so soon after cleaning up the mess from the last time? Global equity markets have suffered some sharp reverses in recent days, so we may soon find out. Carney, with his Ottawa-bred caution and with an eye on the hyper London property market, probably won't be swayed from his intent to start tightening within the next few months. But I'm not nearly so sure about his counterpart in Washington. What price the "Yellen put"?
If that's the case, then what's holding the BoE and other central banks back? As this article reporting a speech by Carney's new Deputy Governor makes clear, it's mostly the lack of any evidence that wage pressures are increasing. Fed Chair Janet Yellen has repeatedly made a similar point regarding the US. But why would anyone expect rising wage pressures? Unions have been forced on the defensive worldwide; labour laws have been amended in favour of employers; globalization means that corporations are constantly moving production from jurisdiction to jurisdiction in search of lower costs; firms are systematically replacing full-time jobs with part-time and contract positions. How are wages supposed to rise in these circumstances?
If the key drivers of wage trends were cyclical, then it would be appropriate for central banks to monitor labour markets closely and to warn of the need to tighten policy once signs emerged of wage cost pressures. As it is, all the evidence seems to suggest that what we are seeing is a sustained, secular fall in wages -- or, as it's increasingly commonly expressed, a long-term rise in income inequality. If this is the case, labour market trends are the wrong place for central bankers to focus on as they set monetary policy.
So where should they be looking instead? Here's a clue: when Carney made his statement-of-the-obvious, UK share prices promptly took a dive. For the last couple of years we have been living in a world in which asset prices (real estate as well as stocks) have been pushing ever higher, even though the vital signs of the world economy remain below par. As anyone who was watching aghast as the Greenspan era imploded could tell you, pumping money into the system creates an asset price bubble.
Are the central banks really going to make the same mistake again, so soon after cleaning up the mess from the last time? Global equity markets have suffered some sharp reverses in recent days, so we may soon find out. Carney, with his Ottawa-bred caution and with an eye on the hyper London property market, probably won't be swayed from his intent to start tightening within the next few months. But I'm not nearly so sure about his counterpart in Washington. What price the "Yellen put"?
Monday 22 September 2014
Memo to Tony Blair: just SHUT UP!
I figure that Tony Blair doesn't even blow his nose these days unless someone else is paying to launder his handkerchiefs, so I wonder who's funding his latest outburst. The moneygrubbing warmonger has posted an essay on his website arguing that western countries need to commit ground forces in order to defeat the ISIS/ISIL threat. Air power alone won't do it, says he. He was on the news networks this morning with a deeply furrowed brow, delivering the same message.
These people never learn, do they? Blair has never admitted that he and his pals in London and Washington faked the case for war against Saddam Hussein back in 2003. Still less has he ever shown any sign of realizing that it was that misbegotten war that set off the mess threatening to incinerate the entire Middle East right now.
If we're going to send anyone in on the ground against ISIS, I nominate Blair, Bush 43 and Dick Cheney as the first guys to strap on the parachutes. It's your mess, gentlemen, and if anyone's going to risk their lives in a futile attempt to clean it up, it should be you.
These people never learn, do they? Blair has never admitted that he and his pals in London and Washington faked the case for war against Saddam Hussein back in 2003. Still less has he ever shown any sign of realizing that it was that misbegotten war that set off the mess threatening to incinerate the entire Middle East right now.
If we're going to send anyone in on the ground against ISIS, I nominate Blair, Bush 43 and Dick Cheney as the first guys to strap on the parachutes. It's your mess, gentlemen, and if anyone's going to risk their lives in a futile attempt to clean it up, it should be you.
Friday 19 September 2014
Scotland's NO vote changes everything
The people of Scotland may have voted NO to independence in yesterday's referendum, but the UK will never be the same again, thanks to the panicked promises of additional devolution that Westminster-based politicians made in the final days of the campaign. As a very articulate Tory MP told Canada's news channel before the results were announced, the outcome of a NO vote stands to be much messier for the whole UK than a YES would ever have been.
As a veteran of two referenda in Quebec and one-time resident of the UK (and partner of a half-Scottish wife), I've blogged a number of times about the similarities between the Quebec and Scottish separatist movements. However, to understand why yesterday's vote will make things so complicated for the UK in the future, we need to look at the differences between the two cases.
The driving force behind the Quebec and Scottish nationalist movements is very different. In Quebec, it's all about ethnicity. Oh sure, the Parti Quebecois was once broadly left-leaning, but those days are gone. The recent Quebec provincial election, which the PQ hoped would set the stage for a third referendum, saw the party adopt a thoroughly nasty stance toward English Canada and the Province's own non-francophone minorities. Mercifully, this was soundly repudiated by the voters. In truth, however, the mean-spirited tone was nothing new: recall former PQ leader Jacques Parizeau's somewhat inebriated concession speech after the 1995 referendum, which began "Yes, it's true that we lost, but to what? To money and the ethnic vote".
In contrast, although there's obviously an ethnic underpinning to Scottish nationalism, the movement as it presently stands is much more about different ways of viewing the economy and society. Scots see themselves as much more collectively-minded than their neighbours to the South. There was a telling campaign placard that copped up late in the day: "Vote YES and be rid of the Tories for ever". Pro-YES supporters included groups like "South Asians for Scottish independence", something that could never be imagined in modern Quebec.
This is both good news and bad news for the UK government as it tries to deal with the post-referendum situation. In Quebec, ethnicity will always be a divisive issue, which is why the "neverendum" nightmare of repeated sovereignty votes remains a real possibility. In Scotland, it should in principle be possible to forestall a rerun of Thursday's vote by devolving the powers that Scotland needs in order to achieve the kind of society it wants, without overweening interference from London.
Here, however, we run up against the second key difference between the two cases: Canada is now and has always been a confederal state: its ten Provinces have broad-ranging powers which are jealously protected from interference by the Federal government. The UK has, until recently, been mostly a unitary state. The devolution of power over the last two decades has awarded vastly different degrees of autonomy to assemblies in Edinburgh, Cardiff and Belfast, with no comparable level of self-rule for England, which is by far the dominant entity, in terms of population and economic clout, within the UK.
One of the ways that Canadian federal governments have sought to combat Quebec nationalism has been to give the provincial government there additional powers that help to address the ethnic grievances of the francophone population. Thus Quebec is allowed to have its own language laws giving priority to the use of French; it has a degree of control over immigration to the Province; and its legal system is still based on the Code Napoleon rather than the English common law-based system in the rest of Canada. These rights -- characterized as Quebec's "distinct society" -- are largely cost-free for the rest of Canada, and do not threaten the basis of the federal system.
This would be all but impossible to reproduce in the UK without far-reaching reforms of the nation's entire governance. The powers devolved in the past to Scotland, Wales and Northern Ireland have already led to stirrings of discontent in the English regions. If, as now seems likely, Scotland gets a whole host of new taxing powers and control over social programs, this discontent can only grow. To take but one example, Scotland is likely to get the right to set its own corporate tax rate. Politicians in the north of England have already voiced concern that this will place them at a serious disadvantage in attracting new businesses or retaining existing ones.
Whatever specific powers are agreed for Scotland in the next few weeks, it's all but certain that Wales and Northern Ireland will also want the same for themselves. This would potentially leave England, while still the dominant partner in the Union, in a weakened position, unless a way is found to devolve similar powers to some form of English assembly. But how would that work? London's dominance of the national economy means that an assembly for the whole of England would be all but useless. London can fend for itself against all comers; Liverpool, Hull and Newcastle, not so much.
And then there's what's known as the "West Lothian question". As Scotland has acquired more powers, there has been a lively debate about whether Scottish MPs at Westminster should be allowed to vote on matters that only affect England. Deputy Prime Minister Nick Clegg has already said that this issue needs to be addressed as part of the next round of devolution. If all three of England's Celtic partners in the UK wind up with greater powers, answering the West Lothian question will become even more of a priority.
We've recently been learning in Canada, courtesy of the excellent Chantal Hebert, just how unprepared the Federal government was for the possibility of a YES vote in the 1995 Quebec referendum. Scotland may have voted NO this week, but it remains to be seen whether David Cameron's government is any better prepared to deal with the vastly changed world that it now faces.
As a veteran of two referenda in Quebec and one-time resident of the UK (and partner of a half-Scottish wife), I've blogged a number of times about the similarities between the Quebec and Scottish separatist movements. However, to understand why yesterday's vote will make things so complicated for the UK in the future, we need to look at the differences between the two cases.
The driving force behind the Quebec and Scottish nationalist movements is very different. In Quebec, it's all about ethnicity. Oh sure, the Parti Quebecois was once broadly left-leaning, but those days are gone. The recent Quebec provincial election, which the PQ hoped would set the stage for a third referendum, saw the party adopt a thoroughly nasty stance toward English Canada and the Province's own non-francophone minorities. Mercifully, this was soundly repudiated by the voters. In truth, however, the mean-spirited tone was nothing new: recall former PQ leader Jacques Parizeau's somewhat inebriated concession speech after the 1995 referendum, which began "Yes, it's true that we lost, but to what? To money and the ethnic vote".
In contrast, although there's obviously an ethnic underpinning to Scottish nationalism, the movement as it presently stands is much more about different ways of viewing the economy and society. Scots see themselves as much more collectively-minded than their neighbours to the South. There was a telling campaign placard that copped up late in the day: "Vote YES and be rid of the Tories for ever". Pro-YES supporters included groups like "South Asians for Scottish independence", something that could never be imagined in modern Quebec.
This is both good news and bad news for the UK government as it tries to deal with the post-referendum situation. In Quebec, ethnicity will always be a divisive issue, which is why the "neverendum" nightmare of repeated sovereignty votes remains a real possibility. In Scotland, it should in principle be possible to forestall a rerun of Thursday's vote by devolving the powers that Scotland needs in order to achieve the kind of society it wants, without overweening interference from London.
Here, however, we run up against the second key difference between the two cases: Canada is now and has always been a confederal state: its ten Provinces have broad-ranging powers which are jealously protected from interference by the Federal government. The UK has, until recently, been mostly a unitary state. The devolution of power over the last two decades has awarded vastly different degrees of autonomy to assemblies in Edinburgh, Cardiff and Belfast, with no comparable level of self-rule for England, which is by far the dominant entity, in terms of population and economic clout, within the UK.
One of the ways that Canadian federal governments have sought to combat Quebec nationalism has been to give the provincial government there additional powers that help to address the ethnic grievances of the francophone population. Thus Quebec is allowed to have its own language laws giving priority to the use of French; it has a degree of control over immigration to the Province; and its legal system is still based on the Code Napoleon rather than the English common law-based system in the rest of Canada. These rights -- characterized as Quebec's "distinct society" -- are largely cost-free for the rest of Canada, and do not threaten the basis of the federal system.
This would be all but impossible to reproduce in the UK without far-reaching reforms of the nation's entire governance. The powers devolved in the past to Scotland, Wales and Northern Ireland have already led to stirrings of discontent in the English regions. If, as now seems likely, Scotland gets a whole host of new taxing powers and control over social programs, this discontent can only grow. To take but one example, Scotland is likely to get the right to set its own corporate tax rate. Politicians in the north of England have already voiced concern that this will place them at a serious disadvantage in attracting new businesses or retaining existing ones.
Whatever specific powers are agreed for Scotland in the next few weeks, it's all but certain that Wales and Northern Ireland will also want the same for themselves. This would potentially leave England, while still the dominant partner in the Union, in a weakened position, unless a way is found to devolve similar powers to some form of English assembly. But how would that work? London's dominance of the national economy means that an assembly for the whole of England would be all but useless. London can fend for itself against all comers; Liverpool, Hull and Newcastle, not so much.
And then there's what's known as the "West Lothian question". As Scotland has acquired more powers, there has been a lively debate about whether Scottish MPs at Westminster should be allowed to vote on matters that only affect England. Deputy Prime Minister Nick Clegg has already said that this issue needs to be addressed as part of the next round of devolution. If all three of England's Celtic partners in the UK wind up with greater powers, answering the West Lothian question will become even more of a priority.
We've recently been learning in Canada, courtesy of the excellent Chantal Hebert, just how unprepared the Federal government was for the possibility of a YES vote in the 1995 Quebec referendum. Scotland may have voted NO this week, but it remains to be seen whether David Cameron's government is any better prepared to deal with the vastly changed world that it now faces.
Monday 15 September 2014
Off the air
There are lots of little annoyances about being a TV viewer in Canada. The main regulator, the CRTC, imposes mandatory Canadian content requirements on local broadcasters, which results in a lot of sub-standard, highly parochial stuff making it onto the air. (If you are reading this outside of Canada, I will make a sizable bet that you will never have the joy of seeing such comedies as "Corner Gas" or "Little Mosque on the Prairie"). Stations broadcasting US programming at the same time as just-across-the-border US stations are required to substitute local commercials for those from the US, which both angers the US stations and leads to regular technical issues. And cable TV providers have a nasty habit of "bundling" services in a way that forces most viewers to pay for stuff they never watch, in order to get the ones that they want.
All of this, and a whole lot more, is up for debate as the CRTC holds hearings on the future of Canadian TV. One media commentator has characterized the hearings as "The Netflix Show". The broadcasters and cable companies are running scared of Netflix, which is not subject to as many pettifogging rules as traditional content providers are. In the time-honoured way are looking at how they can wrap it up in regulatory knots, rather than figuring how to compete with it.
As for the bundling of cable services, the cable boys are responding to the CRTC's suggestion of allowing viewers to "pick and pay" for only the channels they want with something like an open threat. They are insisting that the amount they would charge for individual channels under such a system would result in many or most people paying more than they currently do with bundling.
The public broadcaster, CBC, made its pitch to the hearings a day or two ago. There's a lot of technical stuff about who pays for what, but there's also this little bombshell:
"The CBC is also recommending that TV stations no longer be obliged to offer over-the-air services to the 5 to 7 per cent of households without cable or satellite."
Got that? No more fuddy-duddy, old-style TV over the airwaves, if CBC gets its way. If you're one of those nasty folk who've invested in a bigger antenna in order to pick up better signals while ditching your cable contract, and even worse, if you're evil enough to be supplementing that with a Netflix subscription, why, you're undermining the entire foundation of Canadian broadcasting, if not of the country itself. It remains to be seen whether the CRTC will go along with the CBC's recommendation, or with any of the other bilk-the-consumer schemes that have been laid before it, but right now, there doesn't seem to be anyone speaking up very loudly for the interests of the general public.
All of this, and a whole lot more, is up for debate as the CRTC holds hearings on the future of Canadian TV. One media commentator has characterized the hearings as "The Netflix Show". The broadcasters and cable companies are running scared of Netflix, which is not subject to as many pettifogging rules as traditional content providers are. In the time-honoured way are looking at how they can wrap it up in regulatory knots, rather than figuring how to compete with it.
As for the bundling of cable services, the cable boys are responding to the CRTC's suggestion of allowing viewers to "pick and pay" for only the channels they want with something like an open threat. They are insisting that the amount they would charge for individual channels under such a system would result in many or most people paying more than they currently do with bundling.
The public broadcaster, CBC, made its pitch to the hearings a day or two ago. There's a lot of technical stuff about who pays for what, but there's also this little bombshell:
"The CBC is also recommending that TV stations no longer be obliged to offer over-the-air services to the 5 to 7 per cent of households without cable or satellite."
Got that? No more fuddy-duddy, old-style TV over the airwaves, if CBC gets its way. If you're one of those nasty folk who've invested in a bigger antenna in order to pick up better signals while ditching your cable contract, and even worse, if you're evil enough to be supplementing that with a Netflix subscription, why, you're undermining the entire foundation of Canadian broadcasting, if not of the country itself. It remains to be seen whether the CRTC will go along with the CBC's recommendation, or with any of the other bilk-the-consumer schemes that have been laid before it, but right now, there doesn't seem to be anyone speaking up very loudly for the interests of the general public.
Thursday 11 September 2014
Empty threats
With referendum day just a week away, the campaign over Scottish independence has suddenly taken a nastier turn, after months of remarkably civil debate. Recent polls have suggested that the pro-independence side has gained momentum late in the campaign, and a YES vote is a genuine possibility. This has lit a fire under Westminster politicians, prompting a last-minute charm offensive (to the extent that David Cameron et al can actually do charm), coupled with dire warnings about what Scotland stands to lose if it opts to go it alone.
A lot of the most divisive rhetoric has surrounded the question of the pound Sterling. Scotland's First Minister, Alec Salmond, has always stated that his first preference would be for Scotland to continue to use the pound after independence. Politicians in London have always warned that this would not be acceptable, and those warnings have become louder as the polls have shown the YES side gaining ground. The last few days have seen some harsh rhetoric and threats over this key issue.
Chancellor George Osborne has said there are "no ifs or buts": if Scotland goes it alone, it will not be allowed to keep using Sterling. Bank of England Governor Mark Carney, who as a Canadian must feel a little uncomfortable dealing with this topic, says that for Scotland to retain Sterling would not be compatible with sovereignty.
I'm no lawyer, but it's not entirely clear to me that the rest of the UK can prevent Scotland from using Sterling if it chooses to do so. Who actually owns the currency? Surely, as part of the United Kingdom since well before the Bank of England was created, Scotland has just as much claim to ownership as England or Wales does. To use an analogy, modern legal practice does not discriminate against the instigator of divorce in dividing up the assets of a marriage. Why should the legal breakup of a union between states be any different?
A further threat has also emerged at this late stage, with several banks, including Royal Bank of Scotland, warning that they would feel compelled to move their head offices from Scotland to London in the event of independence. It's not clear that this would be anything more than the unbolting of a nameplate in Edinburgh and its reattachment in London: no operations or jobs would move south. In that sense it may be a bit of an empty threat, but that hasn't stopped the NO side from sounding the alarm. One argument being advanced for the banks to move south is that they would need to be close to the Bank of England as regulator and lender of last resort, but this seems far-fetched. No French or Italian banks have felt the need to move their HQs to Frankfurt in order to be close to the ECB.
Not all of the threats have come from the NO side. Alec Salmond has responded to the warnings about Sterling by vowing that Scotland will refuse to assume its share of the UK's national debt if it is not allowed to retain the pound. This may be the emptiest threat of all: as a new country and an untested credit, Scotland could not afford to alienate capital markets by simply walking away from the UK's obligations in that way.
It's hard to know how seriously to take all of this posturing. If there really is a YES vote, there will certainly be hurt feelings on both sides of the border, but Edinburgh and London have agreed a timetable that allows a full eighteen months for negotiations on the precise terms of separation. It's not in anyone's interest to make economic relations between Scotland and the rest of the UK more difficult, so in the end, it's probable that some sort of arrangement over Sterling (and the UK's national debt) will be reached. Too bad this rather technical issue has introduced a last-minute element of element of rancor into what has been, for the most part, an exemplary democratic exercise.
A lot of the most divisive rhetoric has surrounded the question of the pound Sterling. Scotland's First Minister, Alec Salmond, has always stated that his first preference would be for Scotland to continue to use the pound after independence. Politicians in London have always warned that this would not be acceptable, and those warnings have become louder as the polls have shown the YES side gaining ground. The last few days have seen some harsh rhetoric and threats over this key issue.
Chancellor George Osborne has said there are "no ifs or buts": if Scotland goes it alone, it will not be allowed to keep using Sterling. Bank of England Governor Mark Carney, who as a Canadian must feel a little uncomfortable dealing with this topic, says that for Scotland to retain Sterling would not be compatible with sovereignty.
I'm no lawyer, but it's not entirely clear to me that the rest of the UK can prevent Scotland from using Sterling if it chooses to do so. Who actually owns the currency? Surely, as part of the United Kingdom since well before the Bank of England was created, Scotland has just as much claim to ownership as England or Wales does. To use an analogy, modern legal practice does not discriminate against the instigator of divorce in dividing up the assets of a marriage. Why should the legal breakup of a union between states be any different?
A further threat has also emerged at this late stage, with several banks, including Royal Bank of Scotland, warning that they would feel compelled to move their head offices from Scotland to London in the event of independence. It's not clear that this would be anything more than the unbolting of a nameplate in Edinburgh and its reattachment in London: no operations or jobs would move south. In that sense it may be a bit of an empty threat, but that hasn't stopped the NO side from sounding the alarm. One argument being advanced for the banks to move south is that they would need to be close to the Bank of England as regulator and lender of last resort, but this seems far-fetched. No French or Italian banks have felt the need to move their HQs to Frankfurt in order to be close to the ECB.
Not all of the threats have come from the NO side. Alec Salmond has responded to the warnings about Sterling by vowing that Scotland will refuse to assume its share of the UK's national debt if it is not allowed to retain the pound. This may be the emptiest threat of all: as a new country and an untested credit, Scotland could not afford to alienate capital markets by simply walking away from the UK's obligations in that way.
It's hard to know how seriously to take all of this posturing. If there really is a YES vote, there will certainly be hurt feelings on both sides of the border, but Edinburgh and London have agreed a timetable that allows a full eighteen months for negotiations on the precise terms of separation. It's not in anyone's interest to make economic relations between Scotland and the rest of the UK more difficult, so in the end, it's probable that some sort of arrangement over Sterling (and the UK's national debt) will be reached. Too bad this rather technical issue has introduced a last-minute element of element of rancor into what has been, for the most part, an exemplary democratic exercise.
Friday 5 September 2014
Not again, surely?
For the second month in a row, Statistics Canada has announced employment data that are wildly out of line with market expectations. The agency reported today that the economy lost 11,000 jobs in August, as opposed to analysts' consensus forecast of a 10,000-job increase.
The details of the data are puzzling a lot of the experts, with at least one bank's economists calling the report "fishy". Specifically, StatsCan claims that the number of private sector jobs fell by 111,800 in the month, the largest decline ever recorded. In the absence of any large layoff announcements in recent months, this looks improbable, at the very least. Meantime, the number of Canadians who are self-employed supposedly jumped by 87,000 in August, which is also an all-time record for a single month.
After the release of its July employment report, StatsCan was forced into a hasty retreat when it realized that the numbers were wrong. It subsequently issued a much-revised set of numbers, blaming human error. The same thing surely couldn't have happened again in August, could it? You wouldn't think so, but today's data are again so counter-intuitive that the possibility can't be ruled out.
In any event, US non-farm payrolls data were also released today and showed that the American economy added 142,000 jobs in the month. Even if the Canadian data had been in line with the market consensus, that would mean that the Canadian economy is still underperforming its larger neighbor in creating jobs. At the end of the day, that's more significant than any snafus in StatsCan's data collection methods.
The details of the data are puzzling a lot of the experts, with at least one bank's economists calling the report "fishy". Specifically, StatsCan claims that the number of private sector jobs fell by 111,800 in the month, the largest decline ever recorded. In the absence of any large layoff announcements in recent months, this looks improbable, at the very least. Meantime, the number of Canadians who are self-employed supposedly jumped by 87,000 in August, which is also an all-time record for a single month.
After the release of its July employment report, StatsCan was forced into a hasty retreat when it realized that the numbers were wrong. It subsequently issued a much-revised set of numbers, blaming human error. The same thing surely couldn't have happened again in August, could it? You wouldn't think so, but today's data are again so counter-intuitive that the possibility can't be ruled out.
In any event, US non-farm payrolls data were also released today and showed that the American economy added 142,000 jobs in the month. Even if the Canadian data had been in line with the market consensus, that would mean that the Canadian economy is still underperforming its larger neighbor in creating jobs. At the end of the day, that's more significant than any snafus in StatsCan's data collection methods.
Thursday 4 September 2014
Eurozone weakness: desperate measures
The ECB took markets by surprise today, cutting its already microscopic rate even further as the Eurozone continues to struggle. The Bank's reference rate is now 0.05%, down from 0.10%, while its deposit rate is now minus 0.2%. The ECB also announced that it will start buying asset-backed securities next month, although a full QE-type program that would involve buying sovereign debt is still not in the cards.
Will any of this help? The cut in the reference rate is surely no more than symbolic. As for the deposit rate, the linked article notes that the ECB hopes that by making it more expensive for banks to park their cash, it may persuade them to lend more to businesses and consumers. It's equally or more likely that the ECB's evidently dire view of the Eurozone's economic prospects will scare lenders into being even more cautious. And as for the ABS purchases, which are intended to free up balance sheet space, it's not clear who would want to sell relatively secure assets of this type to the ECB and then deposit the funds with the Bank at a negative interest rate.
As in the US, UK and Canada, the balance of monetary and fiscal policy has been wrong for the last several years. Monetary policy is too loose, fiscal policy unnecessarily tight. What sets Europe apart from the other three economies is that while each of the latter has seen at least some resumption of growth in the last couple of years, the situation in the Eurozone only seems to be getting worse. There really does not seem to be much that ECB Governor Draghi can do about it, short of a full QE program, which would not go down well in Germany.... and now there are growing fears that sanctions against Russia and the possibility of disruptions in gas supplies in the coming winter will make things even worse.
Will any of this help? The cut in the reference rate is surely no more than symbolic. As for the deposit rate, the linked article notes that the ECB hopes that by making it more expensive for banks to park their cash, it may persuade them to lend more to businesses and consumers. It's equally or more likely that the ECB's evidently dire view of the Eurozone's economic prospects will scare lenders into being even more cautious. And as for the ABS purchases, which are intended to free up balance sheet space, it's not clear who would want to sell relatively secure assets of this type to the ECB and then deposit the funds with the Bank at a negative interest rate.
As in the US, UK and Canada, the balance of monetary and fiscal policy has been wrong for the last several years. Monetary policy is too loose, fiscal policy unnecessarily tight. What sets Europe apart from the other three economies is that while each of the latter has seen at least some resumption of growth in the last couple of years, the situation in the Eurozone only seems to be getting worse. There really does not seem to be much that ECB Governor Draghi can do about it, short of a full QE program, which would not go down well in Germany.... and now there are growing fears that sanctions against Russia and the possibility of disruptions in gas supplies in the coming winter will make things even worse.
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