So the conspiracy theorists and unionists had it right: the powers that be were using the prospect of the worst recession since the Dirty Thirties to shed jobs, willy-nilly.
It’s right there in the Globe and Star this morning. Front page news. The recession that’s killed the auto industry and turned the manufacturing heartland to rust, is officially over, according to Bank of Canada governor Mark Carney.
Phew. What a relief.
More like what a load of crap.
What are we to make then of the ominous predictions of our own finance minister barely a few weeks ago that this recession will be much longer and deeper than anyone predicted?
Were they lying to us then or are they lying to us now?
Either we’re dreaming, or Carney is.
News of a supposed recovery has been dotting the business pages like so much wishful thinking with every hiccup in the stock market, every burp in the economy for months now.
For every rose-coloured prediction, though, lost in the back pages has been yet another report of layoffs, plant shutdown or worse than expected profit forecast of yet another major employer.
Willing the economy back to health with positive talk won’t make it happen.
Reality check: the unemployment rate is still expected to eclipse the 10 per cent mark. And the nearly half a million jobs lost over the last nine months won’t be coming back any time soon, probably not ever. The output gap, the tell-all measure of just how well the economy is performing, is still the widest its been since 85, the last time the economy cacked big time.
What are we to make of the record borrowing of Canadians?
The Bank of Canada says it’s an indication consumers are taking advantage of record-low interest rates to buy homes and make other big purchases. But it’s also true Canadians are borrowing more against their credit cards just to stay afloat.
Carney’s prediction that the Canadian economy will grow by 3 per cent the next quarter and another 3.5 per cent the quarter after reeks of false optimism.
Carney’s rosy forecast is based on a huge assumption – that the Canadian dollar will stay around the 87 cents U.S. mark. The Canuck buck opened at 92 cents U.S. this morning with Carney’s announcement we’re on the road to an economic recovery.
With the Tories talking publicly for more than a month now about cutting off any future economic stimulus, the prospect of real economic recovery any time soon are dim at best.
Call me a cynic. But the Parliamentary Budget Office’s economic update less than two weeks ago pointed to large deficits for each of the next five years.
To say nothing of the structural deficit we face ie: not enough revenue to cover expenditures once we get over the current economic hump. How good does that two per cent GST cut look now?
The Canadian Centre for Policy Alternatives surmises that the Tories’ plan is to use the current economic crisis to cut spending, and along with it, the size of government. Sounds like a surefire plan for recovery.
Guess I’ll go out and buy myself that big screen I’ve been eyeing for the last year, on credit of course.[rssbreak]
