investment

Short Guardian Video of Corbyn’s Election Promises

Labour launched its manifesto yesterday, as did the Tories, and the newspapers and TV were full of it. The Guardian, however, produced this little video in which Corbyn presents the party’s manifesto promises in just a minute and a half.

The Labour leader says

‘Labour’s manifesto is a manifesto for hope. That is what this document is. We will unleash a record investment blitz. And it will rebuild our schools, our hospitals, care homes and the housing we so desperately need. Every town, every city and every region. So a Labour government will ensure that big oil and gas corporations that profit from heating up our planet will shoulder the burden and pay their fair share through a just transition tax. We’ll get Brexit sorted within six months. We will secure a sensible deal that protects manufacturing and the Good Friday Agreement. And then put it to a public vote alongside the option of remaining in the EU. And yes, be clear, we will scrap university tuition fees.’ 

At this point there is massive cheering from his audience. He goes on

‘We are going to give you the very fastest, full fiber broadband for free. That is real change. And Labour will scrap Universal Credit.’

More cheering and applause. Corbyn’s speech ends with

‘It’s time for real change. Thank you!’

The crowd rises to give him a standing ovation.

Okay, so this is a very short, very edited version of Corbyn’s speech, just giving the briefest outline of the party’s policies. But it shows that Corbyn’s policies offer real change after forty years of Thatcherism, which has decimated our schools, NHS and public services and destroyed people’s health and lives through savage welfare cuts intended to punish the poor so that the rich could profit. All of which was also carried out by the smarmy face of Blair’s New Labour, who tried presenting themselves as some kind of caring alternative to the Tories, while taking over their odious policies and actually going further.

And as Corbyn says, this is a manifesto of hope. Zelo Street has written a post comparing it with the radical changes that set up the welfare state by Clement Attlee’s 1940s Labour government and their manifesto, Let Us Face the Future. The Sage of Crewe describes how Attlee’s reforms, which set up the post-war consensus, were destroyed by Thatcher, leaving nothing but poverty and run-down, struggling public services, including the NHS, so that the rich 1% can get even richer.

But he writes

Today, Labour brought something to the General Election campaign that recalled the message of 1945, and that something was hope. Hope that students of whatever age would not be saddled with tens of thousands of Pounds of debt for years after graduating. Hope that the punitive benefit sanctions régime would no longer target the sick and disabled. Hope that a living wage really would be enough to live on.

Hope that those out-of-towners without cars would not be effectively trapped in their homes at weekends and in the evening because of public transport cuts. Hope that the NHS would be able to cope without leaving emergency admissions on trolleys in corridors. Hope that someone would, at last, take the Climate Emergency seriously. Hope that the scourge of Universal Credit would at last be consigned to the dustbin of history.

Hope that the victims of press abuse would finally see the long-overdue completion of the Leveson Inquiry, so shamelessly ducked by the Tories in exchange for favourable coverage. Hope that bad housing, and bad landlords, would finally become a thing of the past. Hope that the Police and Fire services will be able to cope, giving security and peace of mind to everyone. Hope of an end to homelessness.

Hope that education will be resourced properly, that teachers will be supported in their work, that pupils will not have to ask parents or guardians to help pay for what should be classroom essentials. Hope of real action to challenge racism in all its forms. Hope for 1950s women that pension injustice will be acknowledged – and tackled. Hope that the divisions caused by the 2016 EU referendum can finally be healed.

He goes on to predict how the people, who have profited from the poverty and misery Thatcherism, and particularly the austerity imposed by the Tories and Lib Dems over the past 9-10 years, will fight to prevent these hopes being realised. He points out that

that alone tells you whose interest is served by the decade of decay that has ravaged so many towns and cities across the country.

And concludes

‘Labour has promised us hope. Let Us Face The Future Once More.’

https://zelo-street.blogspot.com/2019/11/let-us-face-future-once-more.html

This is all precisely what we need, which is why the establishment will do everything they can to prevent ordinary people getting the government, a Labour government, that they deserve. Because, as the Galaxy’s dictator Servalan once said in the BBC SF series Blake’s 7, ‘Hope is very dangerous’.

 

 

Trudeau’s proposed speculation tax

Published by Anonymous (not verified) on Thu, 26/09/2019 - 11:45am in

I’ve written a blog post about the Trudeau Liberals’ recently-proposed speculation tax on residential real estate owned by non-resident, non-Canadians.

The full blog post can be accessed here.

Trudeau’s proposed speculation tax

Published by Anonymous (not verified) on Thu, 26/09/2019 - 11:45am in

I’ve written a blog post about the Trudeau Liberals’ recently-proposed speculation tax on residential real estate owned by non-resident, non-Canadians.

The full blog post can be accessed here.

Supportive housing for persons with serious mental health challenges

Published by Anonymous (not verified) on Mon, 24/12/2018 - 7:00am in

I’ve recently written a ‘top 10’ review of a new book on supportive housing—i.e., subsidized housing with social work support—for persons with serious mental health challenges. The book’s an anthology that was edited by three Ontario-based researchers.

A key questions that emerges in the book is: Should such housing be owned and operated by for-profit providers, or by non-profit providers? An advantage of non-profit ownership, in my opinion, is that a non-profit entity eventually owns the asset.

My full review can be found here.

An Analysis of Financial Flows in the Canadian Economy

Published by Anonymous (not verified) on Fri, 06/07/2018 - 6:35am in

An essential but perhaps overlooked way of looking at the economy is a sector financial balance approach. Pioneered by the late UK economist Wynne Godley, this approach starts with National Accounts data (called Financial Flow Accounts) for four broad sectors of the economy: households, corporations, government and non-residents.

Here’s how it works: in any given quarter or year each sector can be a net borrower or lender, but the sum of the four sectors’ borrowing/lending must equal to zero. This is an accounting identity reflecting the fact that one sector’s borrowing must be another’s (or the combination of all others’) lending.

Consider a government deficit. The flip side of that deficit is that some other sector(s) is in credit by the same amount. For example, a $1 billion in government borrowing must be matched by $1 billion in lending from some combination of households, businesses and non-residents. The same is true about the balances for any other sector. The overall balance for the domestic economy (households, corporations and government) must be offset by an equivalent balance vis-à-vis non-residents.

We can look at these flows over time and map them on to events and policy actions affecting the Canadian economy. Some caution must be taken around interpreting causation in this analysis, but it is a useful framework for thinking about what’s happening in the economy.

Figure 1 shows the four sector balances going back to 1990 (as a percentage of GDP). The lead up to and period after the 2008 global financial crisis is also of great interest. Lines above zero represent a credit position, or net lending; below zero is a deficit position, or net borrowing.

Figure 1:

Source: Statistics Canada, Financial Flow Accounts, Table: 36-10-0578-01 (formerly CANSIM  378-0119)

 

Let’s start with government, in this case the combined federal and provincial government balance (in grey). Many readers will remember the large government deficits of the 1980s and early 1990s, which were headline news and to this day have biased the thinking of all political parties towards austerity. In the early 1990s, those government deficits were largely financed by households (blue) and non-residents (yellow).

As the Canadian economy recovered from a bad recession in the early 1990s, it gained strength through the rest of the decade. Strong revenue growth combined with spending restraint drove combined federal and provincial deficits to zero by 1997, followed by surpluses for most of the next decade (apart from two very small deficits in 2002 and 2003).

In the wake of the 2008 financial crisis we then see the government balance drop to a deficit of 4.7% of GDP in 2010, reflecting expansionary fiscal policy. Relative to GDP these later deficits are nowhere near as large as the deficits in the early 1990s. In each case of deficit, however, it is useful to remember the flip side: the private sector wanted to buy government bonds. Around 2008-10 in particular, investors wanted safe havens in which to place their money.

The changing behaviour of households (in blue) is significant. Historically, it was households who were net lenders to corporations and governments. I was not able to get data prior to 1990 online but that surplus position for households continues before 1990 as well.

That dynamic changes in the mid-1990s. As governments borrowed less, households lent less. But when governments turn to deficits after 2008 it is not households from whom they are borrowing (as would have been expected given historical patterns). Indeed, households become net borrowers as of 1997 and remain so to this day, with net borrowing peaking at 4.8% of GDP in 2007. There is some retrenchment back to 2.2% of GDP by 2009, but household borrowing starts to grow again in the 2013 to 2017 period, and hits 3.5% of GDP in 2017.

This should not be a surprise to anyone following the Canadian economy, in particular the run-up in mortgage debt in recent years. This era, especially 2001 onward, is characterized by very low interest rates, which enable households to take on more debt for a given level of income. And as home prices rose, this new equity for homeowners allows for even greater debt loads. Unfortunately, these data do not break down the distribution within the household sector, so the total is masking some deeply indebted households while some percentage of wealthy households would be in credit positions.

What about corporations? Historically corporations borrowed from households (before the period in Figure 1), but starting in the 1990s, then really picking up in the 2000s is the fact that corporations become net lenders. A study from Statistics Canada attributed this to surging profits accompanied by a slowdown in capital investment (i.e. machinery, equipment and factories) and an increase in financial investments. This pattern of “dead money” – in the words of then-governor of the Bank of Canada Mark Carney – has deteriorated in recent years and the corporate sector even goes into deficit in 2015.

Figure 2 breaks out the corporations balance into financial (banks, insurance companies, etc) and non-financial corporations. Financial corporations are consistently in a net lender position, as would be expected. Non-financial corporations show greater volatility, but notably swing into a net borrowing position since 2012.

Figure 2: Net financial investment of financial and non-financial corporations

 

Finally, go back to Figure 1 and look at non-residents. In the early 1990s non-residents lent to Canadian governments, but during the 1999-2007 period Canadian corporations were net lenders to non-residents, perhaps reflecting trade and investment liberalization.

After 2008, we see a dramatic shift to non-resident lending, and at fairly large magnitudes of around 4% of GDP per year. Even while government deficits shrink after 2010, the total inflows from non-residents continue through to 2017. These data do not tell us from which countries the flows from non-residents are coming, although the US is historically Canada’s largest foreign investor by far, followed by several European countries (Netherlands, Luxembourg, UK and Switzerland).

Overall, this analysis shows some major shifts in the relationships across sectors of the Canadian economy. The shift of households into an ongoing deficit position is notable, as is the role of non-resident lending in recent years. Restrictions to dampen housing markets and the introduction of foreign buyer taxes in BC and Ontario suggest non-resident lending will decline as a share of GDP. And the record levels of household indebtedness, plus increases in interest rates, also point to a potential rebalancing for the household sector.

** With thanks to Joelle Leclaire and David Pringle for comments on an earlier draft.

Impact Investment Data ‘Woeful’

Published by Anonymous (not verified) on Wed, 21/10/2015 - 10:04am in

Global Boom In Responsible Investment

Published by Anonymous (not verified) on Wed, 25/02/2015 - 10:11am in

NFP Benchmarking Project Revealed

Published by Anonymous (not verified) on Thu, 08/01/2015 - 10:24am in

$1.5 Million to Develop Early Stage Social Enterprises

Published by Anonymous (not verified) on Wed, 17/12/2014 - 11:33am in

lnvest in Capacity Instead of ‘Throwing Darts’

Published by Anonymous (not verified) on Wed, 03/12/2014 - 10:38am in

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