Mourning the passing of one of my most important and inspiring mentors, Prof. Mel Watkins. Lifelong dedication to social justice economics, democracy, and sustainability. Thank you Mel for all you did, and we will carry your vision and your powerful method onward, until we win..2
Here's the project we organized through @ccpa in 2014 to pay tribute to the 50th Anniversary of Mel's seminar article on “A Staple Theory of Economic Growth": policyalternatives.ca/publications/r…. His analysis took on renewed relevance & importance with our damaging petro-boom of the 2000s..3
Mel's work was further recognized when he was chosen as the 1st winner of #PEF / @Relentless_econ's Galbraith Prize in 2009: policyalternatives.ca/publications/r…. (He shared that 1st prize with Kari Levitt.) A fitting honour, as Mel continues to inspire a legion of progressive economists...4
Go well Mel, thank you for the gift of your passion and lifelong activism. We will miss you terribly, and will carry on your work with more determination & hope than ever.✊✊✊✊
• • •
Missing some Tweet in this thread? You can try to
force a refresh
This is an own goal: Grocery prices did not surge 1.5% on June 25, they grew by 1.5% over the 12 months ending in May 2024. That's *lower* than the rate when Freeland announced the capital gains reform, and *below* the Bank of Canada's optimal 2% target for inflation. #cdnpoli /2
Can we thus credit Freeland's tax reform for *lowering* the rate of grocery inflation? Of course not: it's ridiculous to link the two. Blaming taxes, instead of Loblaws, Cargill, PepsiCo, oil companies, and climate change for high food prices, is world-class bait and switch. /3
Also, this reform does not increase taxes on families who *run* farms. It counts 1/6 more of large gains made by people who *sell* farms--and only *after* exhausting $1.25m lifetime exemption, special reserves to avg one-time gains, & special rules for intra-family transfer. /4
🇨🇦 consumers ride to the rescue!! 0.7% lift in real household consumption accounts for almost all the 0.4% rise in real GDP in 1Q24. That in turn was thanks mostly to a 1.5% rise in labour compensation, which grew 3x faster than consumer prices (consumption deflator). #cdnecon /2
Real wages are growing now at a decent pace, thanks to feisty unions, higher min wages, and workers demanding real wage repair. That has literally saved 🇨🇦 from a recession. This is the macroeconomic phenomenon of wage-led growth in action. #canlab /3
For those still losing sleep over wage-price spirals, don't worry: the GDP deflator fell slightly, and the consumption deflator (akin to CPI) rose just 0.5%. That's the slowest since COVID lockdowns, and pretty much equals the Bank of Canada's 2% annual target. /4
Biggest non-story in #Budge2024 is the deficit. Fcst hardly changed from last year, despite new spending on several initiatives. That's partly cuz of new $$ from the capital gains change (which is great). But mostly cuz revenues keep outpacing pessimistic forecasts. #cdnecon /2
Those forecasts are still deliberately pessimistic, leaving room for positive surprises before the 2025 election. Conservatives who've invested so much in attacking govt for running bigger deficits will be disarmed. A smaller deficit does nothing to help with cost of living. /3
But direct help with necessities of life (dental care, drugs, child care, disability benefits, student lunches, PSE student loans/grants) will make an incremental difference. Most Canadians will receive something from one or more of those programs. /4
Not the worst thing to fear this awful day, but important anyway: get ready for another burst of oil-led inflation. Orthodox central bankers will claim the only thing to do is keep int rates higher, for longer--punishing workers further for a crisis they didn't cause. /2 #cdnecon
Can we learn from the Feb 2022 price shock, and stop profit-led energy inflation (which quickly spread into the broader economy) before it starts? Here's my Dec'23 @TorontoStar column with ideas for how to prevent another oil-led inflation outburst: . /3thestar.com/business/anoth…
The idea of regulating strategic prices (like energy) to stop inflation from getting going (rather than dragging down the whole economy to stop it later), first ridiculed, is now widely accepted (even by places like the Bundesbank), thanks to work by @IsabellaMWeber & others. /4
Carbon-tax fever is reaching a peak, as April 1 (when both the price and the rebate payments increase) approaches. So I'm re-posting my review of gasoline prices in calendar 2023. Key takeaway: the ups and downs of gasoline prices can't be ascribed to carbon pricing. /2 #cdnecon
Gasoline ended '23 5₵/litre lower than it began, despite a higher carbon price (worth about 3₵/l, offset by CAIP rebates). The ups & downs of oil prices are dominated by oil companies & futures markets, not carbon prices. The 2022 oil price surge added 40x more to gas prices./3
The federal Clean Fuel Reg (which Poilievre derided as a second carbon tax) had no lasting impact either. In fact, Cdns who followed Poilievre's advice to gas up before July 1 to avoid this 'tax' actually lost a few bucks (cuz prices *fell* afterward): . /4centreforfuturework.ca/2024/01/03/rev…
On this last day of 2023, let's look back at the path of gasoline prices (the most volatile major component in 🇨🇦's CPI) over the yr. According to GasBuddy, the avg price today is $1.39/litre. That's 5₵ cheaper than a year ago, but it followed a long, winding road. #cdnecon /2
Of course, the ups and downs of world oil futures markets are the major reason for this roller-coaster (even for gasoline extracted, refined & consumed here in 🇨🇦). What's striking is the irrelevance of Cdn fiscal & climate policies to the path of gas prices over the year. /3
The backstop carbon price rose $15/t April 1. The new Clean Fuel Regulation came into effect July 1. Conservatives claimed both would send gasoline costs soaring. But their impact (small for the carbon price, non-existent for the fuel reg) was swamped by global price turmoil. /4