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

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…

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

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

Wow. It's probably a good thing Michelle Bullock was 7000km away from 🇦🇺 (in HK) when she said all this:
* Households "are actually in a pretty good position"
* Interest rates concerns are "a lot of noise from the general public" [...more]
@ComminsP /2

/2theaustralian.com.au/nation/shopper… * High housing prices are "helping people feel a little bit more wealthy"
* Households are "doing fine" & "managing quite well"
* Households have "large savings buffers" & "they're largely still intact"
* Per capita consumption is falling, but "nevertheless it's strong enough"
/3

Very encouraging news that @UniforTheUnion has reached a tentative agreement with GM Canada after a half-day work stoppage: . This is an important reminder that pattern agreements do not fall from the sky: it takes power to maintain a pattern. #canlab /2unifor.org/news/all-news/… Pattern bargaining used to be more common in 🇨🇦 private sector bargaining. Over past decades companies succeeded in destroying the practice in most sectors--allowing them to whipsaw workers against each other in the same industry. In this case, GM needed a push to swallow it. /3

This is what the NAIRU looks like: hundreds of people, desperate for work despite a labour market the Bank of Canada claims is 'overheated', lining up for a shitty job at McDonalds. Employers WANT more of this desperation: /2 #canlab #cdneconblogto.com/city/2023/08/h… It provides them with a ready pool of labour to draw on when they need it. (Gig platforms have this down pat.) And it frightens and disciplines other employed workers into accepting what their boss offers, instead of fighting back and (egad!) rejecting tentative agreements! /3

Pretty ironic to see the Bank of Cda cite the (slight) April increase in year/year CPI (from 4.3% to 4.4%) as part of the rationale for today's 8th interest hike. Let's refresh their memories as to the *causes* of that uptick, from the StatsCan release: www150.statcan.gc.ca/n1/daily-quoti… /2 The April uptick in yr/yr CPI was mostly due, StatsCan reported, to higher rents & mortgage debt charges. Both of those are direct effects of *higher* interest rates. Mortgage debt (3% of the CPI bundle) is skyrocketing. Rents are a bigger weight (6.57%), also growing fast. /3

Another installment in the Great Aussie Profit-Prices Debate occurred at Senate Estimates yesterday, when RBA Governor Philip Lowe was served a Dorothy Dixer by Senator Bragg, former ED of the BCA (who certainly has a view on whether profits can ever be "too high"). /2 Lowe repeated familiar RBA arguments about why he is not concerned that profits have fueled inflation. But it's worth closely reviewing his language, which speaks volumes about the prior assumptions baked into orthodox macro policy in 🇦🇺. /3

An interesting (and hopeful) angle in today's 🇨🇦 GDP release. Economy-wide inflation (measured by the GDP deflator) has largely abated: up just 1.3% in last 12 mos. This corresponds to a moderation of the excess profits corporations racked up in post-lockdown period. #cdnecon /2 Gross corporate operating surpluses are down 6% over the last yr. That's largely because of lower fossil fuel energy prices (& profits), but also due to easing supply constraints & lower profit-taking in other key sectors (like building products, autos, primary metals, M&E). /3

🧵For those fretting that incremental measures in today's 🇨🇦 #Budget2023 will somehow fan the flames of inflation, please remember: The fiscal foot has been firmly on the brake for 2 yrs. Program spending is down 1/3 since COVID peak. Down 12% in first 9 mos of this fy #cnecon /2 And for those who believe inflation is caused by deficits, please remember: 98% of the COVID deficit has been eliminated. Deficit over 1st 9mos of this fy was just $5.5b (Fiscal Monitor). Year-end deficit may be padded in the budget. But the deficit is effectively gone. /3

In light of Loblaw's inept efforts on social media to justify its super-sized inflation-fueling profits, this is an opportune time to remind shoppers of four crucial economic facts regarding supermarket profitability: 🧵

https://twitter.com/loblawco/status/1620474394282696704?t=C0Pl3OD38fCG1v7vnbWBhA&s=03

#cdnecon /2 A. Food retail profits have more than doubled from pre-pandemic norms. /3

🧵Consumer prices fell 0.6% in 🇨🇦 in Dec., yr/yr CPI growth fell to 6.3% (from 8.1% in June). This is good. But lest anyone interpret this as evidence that Bank of Canada tightening is 'working', or relief is imminent, let's review the short history of this inflation. #cdnecon /2 Pandemic caused big breaks in global supply (not fully repaired yet) & big shifts in global demand (mostly, not fully, rebalanced). Govt stimulus maintained aggregate demand & prevented a depression. For a short time, demand exceeded supply (mostly due to constrained supply). /3

Also true in most other OECD countries too, incl. Canada and Australia (both have record-high profit shares). It is decisions by firms to increase prices that are the proximate cause of inflation, and they've been lifting them substantially more than their own costs require. /2

https://twitter.com/heimbergecon/status/1581188926890704896

I'm amazed at how both the economic right & moral legitimacy of firms literally *causing* inflation are absolutely taken for granted in policy discussions of inflation control. Do we blame 'greed'? Of course not: firms are *supposed* to maximize their profits! #WhatsTheDiff /3

Fine story by @MESandbu for @FT on sustained weakness of business capex across G7 and its consequences (paywall): ft.com/content/3a8731…. I've argued for yrs the greatest contradiction of neoliberalism is weakness of biz investmt, DESPITE the painful favours done for capital. /2 Profit shares are up strongly in most OECD countries thx to neoliberal policies (to suppress labour costs, cut corp tax, deregulate & privatize). Yet capital does less work, not more, measured by its contribution to GDP. This chart from 2nd edition of economicsforeveryone.ca. /3

Ontario's plan to guarantee a 'minimum wage' of $15/hr for gig workers (but ONLY for time engaged on an assignment) will have ABSOLUTELY ZERO impact on the incomes of gig workers. Anyone who thinks it means something does not understand how the gig business model works #canlab…2 Gig workers spend a great deal of time (often OVER HALF) waiting for assigned fares/tasks, or traveling to central hubs. It's bad enough this unpaid time is excluded from this 'minimum wage'. Eg. if you spend half your work day waiting, then the 'min. wage' falls to $7.50 …3

How do EMPLOYERS benefit from paid sick days? Let me count the ways (8):
1. Workers staying home when ill protects health of colleagues.
2. 'Presenteeism' (people coming to work when they can't actually do the job) costs billions.
3. It's a basic decent employment benefit that... ... will help employers retain workers and address their so-called labour 'shortage'.
4. Protecting public health by limiting spread of COVID (& other diseases) results in a stronger economy & higher sales.
5. It allows workers to treat illness faster & get better sooner. ...

Decent, stable work and income are obviously critical for most people. Politicians know it, so they're all trying to look like friends of the workers. But which policies would help & which would hurt? Follow this thread for my takes from tonight's #Elxn44 debate. @CntrFutureWork Phasing out fossil fuels over 20 yrs = a shift of 8000 jobs per year. Retirement absorbs over ½ of those. We could offer full adjustment packages for the others ($250K each) at a cost of $1b/year. Denying the transition doesn't help; starting early does. centreforfuturework.ca/2021/01/18/emp…

THREAD: I will be live-tweeting on labour & employment issues from the #Elxn44 English debate this evening. My impressions and fact checks will draw on recent @CntrFutureWork research into several of the topics that should come up tonight, including:
...2
#cdnpoli #cdnecon a) The economic & employment benefits of universal ECE: centreforfuturework.ca/2020/11/25/chi…. We found a national plan would create over 200K jobs in ECE itself, 80K in supply industries, and support up to 725K more FTE female labour force participants. A big boost to post-COVID recovery
...3

I'm gobsmacked by the interview just now on @cbcasithappens with the manager of Nashville North, a private nightclub on the Stampede grounds in Calgary. His explanation of their privatized health protection plan (allowed now Kenney has lifted all restrictions) was horrifying: ..2 * Club will operate at full capacity, no masks required
* Entrants must either show a facsimile of a COVID vaccination (just 1 shot required, not 2) or take a rapid COVID test
* Both of those are obviously very unreliable (efficacy of 1 shot against COVID variants is risky) ..3

THREAD "Heartbreaking" is the only word I can find to describe today's awful 🇨🇦 #LFS jobs numbers: both the scale of job loss, and their painfully unfair distribution. 213K jobs lost in January, back to August levels of employment, unemployment, and participation. #cdnecon ...2 Just like the first wave, job loss is concentrated among those who can least afford it. Part-timers lost all the jobs; full-timers gained work. Women lost work twice as fast as men. Temporary jobs disappeared 7 times faster than permanent. Youth (under 25) lost work 4x faster...3