On Fri, 26 Dec 1997, Doug Henwood cross-posted from a WSJ story:
> Canada Endured Tough Choices To End a Damaging Recession
> By LARRY M. GREENBERG, ROGER RICKLEFS and MARK HEINZL
> Staff Reporters of THE WALL STREET JOURNAL
> The country's growth rate declined to 2.3% in 1995 from
> 4.1% in 1994 and slid to 1.5% in 1996.
One small note: Canada's much-trumpeted growth rates are pretty sickly
when you consider the demographic factor -- Canada has one of the highest
rates of population growth of any industrialized nation (around 1.3% or
so, I assume due to plentiful immigration). Put another way, real Canadian
wealth per capita went nowhere in 1996, and has crawled along at
1.5-2% rates in the 1990s -- not counting currency fluctuations.
> Meanwhile, the decline of the
> Canadian dollar to 70 U.S. cents from a recent peak of
> about 89 cents in 1991 has given Canadian exporters a
> big advantage. (The U.S. takes about 83% of Canada's
> exports.)
Counting currency fluctuations, approximately 19% of the Canadian
economy vanished into the nether gulfs of the foreign exchange markets, to
be reborn elsewhere as more highly valued yen and euros. So that 2% annual
increase in per capita GDP growth was really a 3% annual decrease. This is
how neocolonies of former Empires fall to pieces: piece by piece.
> Moreover, household debt has soared to 97% of disposable
> personal income from 65% in 1991, Mr. Myers notes. The
> personal savings rate has plunged to less than 1% from
> 8.5% two years ago.
[text cut]
> In addition, the unemployment rate has remained at 9%
> nationally despite the economic boom. While the boom
> creates jobs, restructuring eliminates them. And total
> government debt still equals about 100% of GDP, compared
> with 64% in the U.S., the Organization for Economic
> Cooperation and Development reports.
So all that austerity didn't work, after all; instead, a wild rentier
credit boom, massive American trade deficits, a shame-faced, backdoor
Keynesianism and of course an expansive American Federal Reserve policy
were necessary to prevent our other protectorate (the first one being
Puerto Rico) from completely imploding.
It's like watching the Roman provinces going belly-up, one by one, only
starring Japan and Central Europe as the heathen MicroGoths who are just
beginning to grasp that the masters are now the servants. Let's just hope
they show us more mercy than we've shown to Latin America.
-- Dennis
