• Commentary,  Finance,  Inflation

    Canada’s Grocery Giants Spend Billions on their Own Shares

    Amidst public anger at high food prices, Canada’s major supermarket chains have argued they are not the source of the problem. Food prices are high, they claim, because of higher costs charged by food processors and other suppliers. While their profits have grown to record highs during the current inflationary episode, they claim this merely reflects a normal profit ‘margin’...

  • Commentary,  Finance,  Macroeconomics

    House of Cards: Interest Rates, Household Debt, and the Housing Crisis

    Last week the Bank of Canada increased its overnight interest rate, for the 9th time in little over a year, to 4.75%. In making its announcement, the Bank cited a slight increase in year-over-year headline CPI inflation last month. This, the Bank suggested, was one reason why it abandoned a temporary ‘hold’ on further interest rate increases announced in January. The Bank’s rationale is ironic, because the Bank’s rapid run-up in interest rates was the main cause of that small uptick in inflation

  • Commentary,  Finance,  Inflation,  Macroeconomics

    Getting Ready for GFC 2.0

    One consequence of the unprecedented tightening of monetary policy imposed by central banks in most countries (including Canada) over the past year has been growing fragility in the broader financial system. Banks, near-banks, and other financial players – many of them highly leveraged after 15 years of near-zero interest rates – are now grappling with the impacts of higher interest rates on their investments and balance sheets.

  • Commentary,  Finance,  Inflation

    Profits, Not Wages, Have Driven Canadian Inflation

    Every January, the Globe and Mail newspaper publishes a fascinating set of charts (curated by journalist Jason Kirby) prepared by Canadian economists, with their insights into economic trends likely to shape the following year. Centre for Future Work Director Jim Stanford was invited again to participate in the collection. He submitted the following chart and text, highlighting the dramatic increases in corporate profits in Canada that have been the dominant distributional outcome of recent inflation. In recent months, the Bank of Canada has focused on the labour market as the main culprit behind higher inflation: The unemployment rate is too low, wages are rising too fast and this so-called “overheating”…

  • Commentary,  Finance,  Macroeconomics

    When Will We Learn? Speculation is no Way to Build a Real Economy

    History repeated itself last year in financial markets: several high-flying ventures that once generated a frenzy among financial speculators, came crashing back to earth in the face of higher interest rates, fears of recession, and a rush to the exits by more prescient investors. In this commentary, originally published in the Toronto Star, Centre for Future Work Director Jim Stanford reviews five speculative bubbles that popped in 2022. The most dangerous, from a macroeconomic perspective, is the accelerating downturn in Canadian housing prices – as rising debt charges squeeze prospective buyers. A major downturn in housing will have big impacts on real employment and spending. The common lesson from these…

  • Commentary,  Environment & Work,  Finance

    Finance, Pensions, and the Phase-Out of Fossil Fuels

    The Ontario Federation of Labour recently hosted Labour Confronts the Climate Crisis, a conference on the role of trade unions in fighting to reduce greenhouse gas emissions, achieve a fair transition for workers in fossil fuel industries, and encourage the expansion of sustainable industries such as renewable energy, electric vehicles, and public transit. Speakers included Noam Chomsky, Eriel Tchekwie Deranger, Adrienne Buller, Seth Klein, and Simon Donner. As part of the conference, Centre for Future Work Director Jim Stanford gave a keynote presentation on the economics of energy transition, and the role of pension funds in supporting stronger climate policies and investments in sustainable industries. Here is a video of…

  • Commentary,  Environment & Work,  Finance,  Macroeconomics

    Cryptocurrencies: The Most Useless Speculative Bubble Ever

    The financial pages of newspapers continue to be obsessed with the violent ups and downs of Bitcoin and other cryptocurrencies. And Canadian financial regulators have recently started to crack down on some of that industry’s ‘Wild West’ marketing tactics. In this commentary, originally published in the Toronto Star, Centre for Future Work Director Jim Stanford questions whether these digital products have any useful value whatsoever – and urges policy-makers to actively discourage crypto-speculation in favour of policies promoting actual jobs and production. Good Riddance to the Cryptotraders by Jim Stanford Binance runs one of the largest cryptocurrency trading operations in the world – helping customers speculate on the wild price…

  • Commentary,  Environment & Work,  Finance,  Inequality

    The Contradictions of ‘Caring Capitalism’

    Many companies these days try to promote a ‘socially responsible’ image: giving money to charities, speaking broadly about ‘stakeholders’ and ‘sustainability’, and even joining debates about issues like racism. But when it comes to their own bottom lines, few diverge from the fundamental goals of minimizing costs, avoiding taxes, and maximizing profits – regardless of the harm that might result to their workers, communities, or the environment. In this commentary, originally published in the Toronto Star, Jim Stanford takes aim at contradictions of this ‘kinder, gentler’ image corporations are trying to create. His jumping-off point is Hasbro’s effort to improve the image of its iconic Monopoly board game. The commentary…

  • Commentary,  Finance,  Inequality

    The Revolution Will Not be Led by Day Traders

    Global financial markets have been roiled since the New Year by dramatic surges in shares of several companies – even more gut-wrenching than the usual twists and turns of the paper markets. The rise and quick fall of GameStop shares was the most stunning; some observers attributed its volatility to a “populist” attack (by small-scale retail traders) on the elite bastions of high finance. Jim Stanford begs to differ: in this commentary (originally published in the Toronto Star), he argues the growing popularity of day-trading is not challenging the dominance of financial elites… it is reinforcing it. GameStop Shenanigans Only Enriched the Wealthy By Jim Stanford For a few exhilarating…

  • Commentary,  COVID,  Finance,  Macroeconomics

    The Gap between Stock Markets and Society has Never Been Greater

    It seems counter-intuitive that North American financial markets have been on a tear for several months, in some cases setting all-time record highs – even as the COVID pandemic proves deadlier and longer-lasting than we all hoped for. In this commentary, originally published in the Toronto Star, Jim Stanford considers this “cognitive dissonance” between the exuberance of stock markets and the hardship of the real world. Booming Financial Markets Belie Social Hardship Canadians have confronted an avalanche of depressing news about the COVID-19 pandemic and accompanying recession: infections, deaths, job losses, bankruptcies. Amidst the doom and gloom, however, one light shines brightly. Even as fears of a second wave intensify,…