Relentlessly Progressive Political Economy

Germany has announced a predicted 6% contraction for 2009.  Unemployment is over 8%.

Japan has announced a predicted 3.3% contraction for April 2009 to April 2010.

The UK is sticking to its 3.5% contraction call for 2009.  Unemployment is currently 6.7%

The US just came out with dismal numbers (-6.1% for the first quarter) and the projected contraction for 2009 is officially still 1.2%.  Unemployment is 8.5%.

Ireland has projected a 8.3% contraction and unemployment is now over 11%.

Sweden is projecting a 4.5% contraction for 2009 and unemployment currently is over 8%.

China where good data is is hard to come by is looking at projected growth of 5-7%.  But to put that into perspective it translates into a roughly estimated 40-50 million unemployed workers!

Canada has projected a 3% contraction for 2009 and currently has unemployment rate of 8%.

Last time his father’s people were in power they provoked a Revolution.

Today’s big question is will bond holders take an equity stake in GM or risk a severe hair cut in bankruptcy court. I have no particular experience in Corporate US bankruptcy law so I am hard pressed to see the angles. It strikes me though that given the union has already accepted a swap and the Government the Bond holders are in a precarious state as the major principles have agreed to make the swap. Yet in this ideological climate where the non-governmental financial sector in the US has a huge sense of entitlement and there still exists tremendous ideological support for a certain noblesse oblige in official quarters when it comes to private finance I just can’t come to good sense of what the bondholders know that the rest of us don’t.

Canadians have a particular interest in all this because both the feds and the provinces have stepped in to provide financial support and the unions at Chrysler in any event are posed to take it on the chin. I personally find a debt for equity swap appealing; or in the case of workers a concessions for equity alternative more appealing than the gun of bankruptcy court.

It does beg the question, from a strategic point of view, if the CAW would not be smart to be making a concessions for equity play so that in the event that Chrysler did end up in bankruptcy they would appear to have already been willing to take on the risk and cast the bondholders in a dim light.

In some corners workers taking equity stakes in a context in which they do not enjoy control is a sticky wicket. I am sympathetic to this position, but I think with a little savvy they could play their equity stakes for bigger control. And the sticky wicket argument assumes that if workers take a stake they end up over-identifying with the company and its future viability as a capitalist enterprise and thereby internalise the boss’ voice in their head. That is likely true, but they do so independent of an equity stake in times such as these. So the real question becomes are auto workers capable of running a car company? I think the answer is yes and further I think they are capable of running better car companies than management. Line workers in tandem with engineers could do incredible things from better product design to better assembly design.

There is the argument to be made that when workers take the step towards managing themselves they take a step towards managing their economy.  And I can’t help but think that workers with better sense of how things work at each stage of finance production and distribution would be a useful paliative to today’s malaise and the glib attitude of our ruling class.

Perhaps a more aggressive stance around the bargaining table would enhance the opportunities for workers self control and direction. Perhaps not…but that is the really big question for today.

Well I do not mean to brag but I did argue at the time, along with others, that Mark Carney and the BOC were being overly optimistic to which the usual suspects countered that the BOC had super superior models and modelling acumen. So it was, as it is now that Super Mark and the BOC are beating a hasty retreat from their rosy optimism. The globe reports:

The Bank of Canada cut its benchmark lending rate to the lowest possible, and promised to leave it there for as long as a year in order to fight a recession that is deeper and will last longer than previously thought……

The central bank now predicts that Canada’s gross domestic product will shrink by 3 per cent in 2009, compared with a January estimate for a 1.2-per-cent contraction.

The Bank of Canada also abandoned its relatively optimistic estimate that the economy would rebound to expand 3.8 per cent in 2010. The recovery will be far more muted, with an expansion of 2.5 per cent in 2010, the central bank said.

Mr. Carney and his chief advisers on the governing council are trying to restore confidence amid Canada’s first recession since 1992. Employers have shed more than 270,000 jobs since the country fell into a recession in the fourth quarter, a period during which factories produced at only 75 per cent of their capacities, the lowest rate on record…..

Hmm…maybe we start taking fiscal policy a little bit more seriously now and not its faux ami tax cuts?

Related:

Erin Weir on BoC rate cut.  Better Late Than Never

The Auto Crisis:
Placing Our Own Alternative on the Table

Sam Gindin

Deep economic crises violently interrupt daily lives and force more radical responses onto the public agenda. In the case of the North American auto industry however, that radicalism has been remarkably one-sided. Absent an alternative of their own, workers were (and remain) trapped by their dependency on ‘their’ corporations becoming stronger. On the one hand, corporations and governments have aggressively attacked auto workers and effectively ended their status as the trend-setters for working class gains; on the other, there has been virtually no work interruptions or effective political response from the auto unions.

In the now 100 years since Henry Ford first introduced the assembly line (1908), only the Great Depression matches the present crisis in terms of its impact on the U.S.-based auto companies, their suppliers, and the workers and communities involved. At that time, workers responded with the breakthrough of industrial unionism. Can auto workers respond as creatively today?

The Road to Nowhere

At his first press conference after replacing the former head of General Motors, GM’s new Chief Executive Officer seemed to offer some relief to Canadian auto workers. The new collective agreement in Canada, Fritz Henderson declared, made the Canadian workforce “fully competitive with the UAW” (Globe and Mail, March 31, 2009).

The catch of course was that this was not the end of the story. Soon Henderson was warning that, “We need to go further, you can’t really afford to take anything off the table” (CNN’s “State of the Union”). Part of shunting Richard Wagoner, the former head of GM aside was to put more pressure on the UAW to reopen their agreement and make even more concessions. And as that occurs, GM will surely return with more demands on the CAW.

It used to be that corporations promised jobs for concessions; now they aggressively demand more concessions alongside fewer jobs. That earlier trade-off was of course always a myth. Concessions don’t save jobs because in a capitalist economy, corporations driven by profits and limited by competition or consumer demand won’t or can’t deliver on job guarantees…..Continue reading

The FP reports that The CEO of TD bank directly contradicted Harper’s rosy prediction that Canada would be the first country out of the recession.  What is more, he argued that Canadian Banks would not be leading the way as they were going to be forced to deal with the collapse of securitization and foreign funding.

Canada can’t lead global recovery: Clark

Mr. Clark said he did not agree with the U. S. government’s two-pronged approach of addressing the financial crisis and the recession. “They have the view that you can’t have the economy work if the banks don’t; I would say the banks won’t work if the economy doesn’t work,” he said. He added this period of reintermediation, which was fuelled by a “false boom” in consumer demand by artificially inflated credit markets, would hurt Canada, and he did not believe the country could lead the world in recovery.

“Just because our banks didn’t collapse, Canadians are running around saying, wow, aren’t we terrific. But the reality is this economy is going to get whacked just as hard as economies around the world.”

I am not sure that Canadians were running around talking about how terrific our national banks were and drawing the conclusion that we would experience a mild recession and be the first to recover but I do know it has been the Cons talking points for the last month.

Wow I can’t believe I wrote that.  Sorry but I do believe it.  Pistols, automatics, semi-auto-assault rifles sure why not?  Those class of weapons are already so well regulated that asking those without permission to own them yet register them is like asking a coke dealer to declare how many kilos he or she has on hand.  Criminals don’t register guns, coke, stolen merchandise or any other sundry tool or profit of the trade.  Making it a criminal offence not to register a .22 rifle is just silly.  Heck even making people register a .22 is ridiculous.

But to be constructive here is the one way in which I would support a long gun registry.  First, the owner can register the long gun without possessing a PAL.  Second the long gun registry is not cross linked to the PAL system.  Third, once registered the certificate is good for life, i.e., never has to be renewed.  Fourth, if the long gun is sold the registry must be notified and the seller must confirm that the buyer has a valid PAL.