Robert Reich, the former Secretary of Labor in the Clinton administration (now acting as one of Obama’s informal economic advisors along with Warren Buffett and others) predicts the economy will begin to turn around in “two or three years” with prudent federal investment, but warns that U.S. unemployment rates may rise significantly without “effective government action.”
If you get the chance to watch the whole speech (about an hour long, with the Q&A) delivered last week to the Commonwealth Club of California, you’ll be rewarded with a refreshingly straightforward explanation of the causes of the current deep recession (or “liverwurst” Reich suggests it just might as well be called rather than a “Depression”) and sensible prescriptions for jump-starting the American economy in addition to more ambitious spending initiatives that he realistically notes won’t likely have any significant impact for years to come. Whether you agree or disagree with his philosophy, Reich is, as always, a delightfully engaging and edifying speaker.
From a Canadian perspective, if Reich is correct (taking the middle road between the “Pollyannas” and the “Chicken Littles”) then we can likely expect to be in much the same boat as our friends south of the border for the same period, or possibly even somewhat longer when accounting for delayed reaction time. Can a Harper minority government — firmly in the camp of the Pollyannas for the most part, except when they erratically flip-flop and act like the gloomiest of doomsayers — weather the storm through this year, into the next with no prospect of the cycle turning for another year after that?
Red Tory v.3.0.3 
As long as this thing is brought under control rather quickly the West may be okay, but we need resource commodities to come into higher demand fairly soon.
Quebec’s state-capitalist approach may help protect her Crown Jewels in Aerospace and non-Autootive Transportation manufacturers.
Ontario – alas – is paying the price and will continue to pay the price (outside Toronto) for two decades of inaction – in terms of management of investments in the province. An over-reliance on what will be a radically different Automotive sector and the eradication of Sir John A. Macdonald’s dream of a strong domestic Manufacturing sector (The National Policy) has relegated their longer-term prospects to those more like Michigan’s.
When the original FTA was signed U.S. trade representative Clayton Yeutter was exultant:
“The Canadians don’t understand what they’ve signed. In 20 years, they will be sucked into the U.S. economy.”
sigh.
Still too Pollyanna for me. I’m unconvinced that a wackaloon economy that took 30 years to evolve and which is now supported by well-established institutions and entrenched cultures is going to turn around so quickly.
You still get the impression that Americans believe their version of capitalism is perfect and requires very little fundamental change. I don’t even know where to be begin talking about where fundamental changes are drastically required.
Maybe it’s “too big to fix”…
I dont doubt that what any of these so called financial experts say is what they think is the truth, but, next year when Websters puts forth the list of words that should be deleted from the english language I think “financial expert” should be one of them. Maybe “financial coin tosser” or “financial palm reader”. I have great big belly laughs when Flaherty or Macallom stand in front of the press and tell us they know the best path Canada should take…boy’s, you dont know, you didnt know, no one knows for sure, admit it, its a crap shoot at best……to quote a good blog….”good grief”.
I wasn’t paying attention but thought I overhead on CBC Radio 1 this morning that the Bank of Canada predicted a 5 year recession.
No, actually they’re in the Polyanna camp — predicting a return to positive growth by the end of the year. By the third quarter of the year it’s forecasting 2% growth and 3.5 per cent expansion in the last three months of the year. Don’t hold your breath for that!
next year when Websters puts forth the list of words that should be deleted from the english language I think “financial expert” should be one of them.
Add “consumer” to that list.
You are right RT. It may have been an economist’s response to the BOC report.
RT: “Can a Harper minority Government”
Yes please. Straight to the compost pile.