There are lots of rosy forecasts flirting around predicting a quick turnaround in the Canadian economy. They all rely on some notion that global effective demand is going to raise commodity prices and thus restore growth in Canada. So much of this hinges on what the prospects are for future global growth, not just if house prices stop falling and house and car sales pick up a little in the US.
Roubini who has been consistently ahead of the game has an expanded Q&A in the Financial Times. It needs to be read in full. The point I would make is that any analysis which discounts uncertainty, does not take a more global dynamic approach, and which relies on a couple of discrete sectors is likely to give a false sense of security (or insecurity).
In many ways Roubini makes the point that has been made on this blog several times: the neoliberal growth model is crumbling and there is no simple sense in which we return to 2006.
The basic difference between the bears and the wanna-be bulls seems to resolve itself to whether or not the present crisis is viewed as deeply systematic or superficially located in some auxillary system. That is, whether the problem is with the starter of the engine or with the engine itself.
Everyone expects the US to rebound and once again become “the inevitable consumer”. But this time, it probably won’t happen. And it’s a good thing to – because after a rather severe recession, just maybe we’ll get some solid economic thinking back into this world..
//hpx Save capitalism