Well the last minute end to the Washington showdown on the government shut down and raising the debt ceiling crisis brought to the world by the Tea party Republicans has ended, thankfully at least until next February. There is certainly no evidence that the right wing libertarian faction of the Republican party has drawn any sensible lessons from the near debacle to which they subjected the U.S. and the rest of the globe over the past month. Not only do they continue to insist that they were right to behave as they did but they threaten to do it all over again if they don’t get their way over entitlement reform and fiscal austerity. They have already won a victory over the continuance of the sequestration cuts which will bite even harder come January. Given these events and the agreement to negotiate further cuts in basic welfare and well being programs over the coming months and years, it is difficult to maintain high confidence over the US and global recovery over the coming year. Yet, despite the damage already done and the prospects of further trouble ahead in the near future the economy continues to grow albeit at a very slow pace and the unemployment rates continue their very slow downward trajectory. Unemployment in Canada has fallen to 6.9 % and the rate for August in the U.S. was 7.3 % with it falling in 311 out of 372 census metropolitan areas. According to the U.S. Bureau of Labour Statistics
Yuma, Ariz., and El Centro, Calif., had the highest unemployment rates
in August, 32.6 percent and 26.3 percent, respectively. Bismarck,
N.D., had the lowest rate, 2.4 percent. A total of 207 areas had
August unemployment rates below the U.S. figure of 7.3 percent, 158
areas had rates above it, and 7 areas had rates equal to that of the
nation.
So the situation is still far from perfect. The inflation front is stable and showing no sign of changing anytime soon. U.S. C.P.I. inflation over the past year has been 1.5 %. In Canada the rate is
even lower 1.1 %. This suggests that the economy is still in need of more stimulus which sequestration cuts will not provide.
On other fronts, The Affordable Care Act or Obama Care as it is often called by critics and partisans alike is operational but because of very unfortunate flaws in the computer design of the government web site which is meant to offer consumers easy access to buying insurance at affordable rates where their state doesn’t offer a good alternative, the rollout is a bit of a debacle. Of course, the Republicans have been quick to pounce on this claiming that this shows how flawed the program will be. So a thorough and quick fix of the web site is needed. Given the US advantage in computer technology and ready access to other experts in Canada and abroad this should not be hard to accomplish. The credibility of the program depends upon it and hopefully it is now a top priority. Actually, it should have been all along but that’s another story.
France is complaining about American eavesdropping on its citizens with more than 70 million calls, computer searches, texts, social media messages and so on having been secretly vacuumed up in one month alone. The French have formally complained that its no way to treat a friend and ally and it was front page news in Le monde today. So far the Americans are not saying much, but the legitimate issues of privacy and civil rights in a democratic society continues to be front and centre in this debate. It doesn’t help matters to simply respond they are only doing what every one else is doing.
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About haroldchorneyeconomist
I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
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