Politics

Economy lost in din of 2020 politics | TheHill – The Hill

Published

5 years ago

January 9, 2020

There was never any question that the headlines in 2020 would be dominated by the presidential campaign. No one ever expected 2020 to be a year of “the economy, stupid!” Chairman Mao’s dictum “Put politics in command!” seems more to the point.

Writing those lines the morning after Iran’s missile strike on U.S. bases in Iraq, I cannot put out of my mind the way possible political twists could affect the economy. For months, analysts have pondered whether the announcement of a U.S.-China trade deal would raise economic spirits in 2020. Now we have the prospects of military conflict in the Middle East, perhaps with rising oil prices and patriotic fervor on all sides, to think about.

Prognosticating about the impact of political events on the economy seems both doomed to failure and thankless. Having acknowledged that politics will dominate this year, allow me to turn to the somewhat more tractable field of the state of the economy and its short-term prospects.

In the second and third quarters of 2019, U.S. economic growth moved into a lower gear. Real GDP grew at just about 2 percent in both quarters, buoyed by steady growth in consumer spending. Increasingly, consumers have been isolated in pushing the economy forward; their only supporting partner has been government, but the push from the 2017 tax bill has largely run out of steam.

On the negative side, business investment in new equipment, factories and structures actually fell, while construction of homes and apartments grew feebly. Investment, the most volatile part of GDP, is the one that usually drives expansions and recessions. For example, the last recession was triggered by the collapse of home prices and the near-cessation of residential construction.

This 2 percent pace is reasonably healthy. With unemployment still very low and inflation a touch below the Federal Reserve’s 2 percent target, the economy is fairly healthy, as Federal Reserve Chairman Jerome Powell has repeatedly emphasized. Overall, wages are growing a bit faster, but not fast enough to create concerns about rising inflation.

The $64,000 question is whether all of this can last. The U.S. economy has officially been in an expansion for more than a decade, setting a post-World War II record for the longest expansion period. The word “roaring” will not come to anyone’s lips, but fans of slow and steady (go Tortoise!) will have a chance to make their point. The Fed’s two rate cuts in 2019 should provide support for interest-sensitive sectors of the economy, such as housing and consumer durables, as mortgages and car loans become a bit more attractive.

U.S. financial markets mainly seem to be thriving, especially the stock market. But there was a bit of a stir over “yield-curve inversion” in the fall, with one-year interest rates higher than the 10-year rates. In the past, this has been a leading indicator of a recession, reflecting expectations that economic activity would fall in the next year or two. But dramatic changes in the structure of the U.S. financial system, with banks losing much of their central role as deposit-takers to money market mutual funds and their central role as lenders to bond issuance and non-bank lenders, cast some doubt on the reliability of this signal.

There are some pockets of stress in the financial markets, most of all increased signs of companies having difficulties repaying “leveraged loans,” a category of risky loans. So far, however, nothing more concrete has emerged, although caution requires me to note that financial risks are not always detected in advance.

Looking beyond the U.S., world economic growth has been slowing. The usually reserved International Monetary Fund used dramatic language when it said that “the outlook remains precarious” in its last World Economic Outlook published on October 15, with both Europe and Japan in a weak state. China’s GDP growth also seems to have slowed, partly from the effects of the trade war and partly from long-standing growth challenges.

Usually, U.S. recessions are made in America, not abroad. The weakness beyond our shores probably would not be enough to plunge the U.S. into recession. But if U.S. consumers do become more cautious, or a significant problem emerges in the financial sector, a recession could very well be on the horizon.

Often, economists speculate about “soft-landings” and continued expansion. Recessions tend to be global events these days, and they usually hit the major economies at more or less the same time. By professional training and personal disposition, I am a bit of a pessimist. I always expect that the next recession will hit us, my only question is when. 2020 might not be the year of the next recession, but then again, it might.

But what are the chances that we will even notice the economy above the din of political news?

Evan Kraft is the economist in residence for the economics department at American University. He served as director of the Research Department and adviser to the governor of the Croatian National Bank.

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Politics

‘Disgraceful:’ N.S. Tory leader slams school’s request that military remove uniform

Published

5 days ago

November 8, 2024

Anne Joseph

HALIFAX – Nova Scotia Premier Tim Houston says it’s “disgraceful and demeaning” that a Halifax-area school would request that service members not wear military uniforms to its Remembrance Day ceremony.

Houston’s comments were part of a chorus of criticism levelled at the school — Sackville Heights Elementary — whose administration decided to back away from the plan after the outcry.

A November newsletter from the school in Middle Sackville, N.S., invited Armed Forces members to attend its ceremony but asked that all attendees arrive in civilian attire to “maintain a welcoming environment for all.”

Houston, who is currently running for re-election, accused the school’s leaders of “disgracing themselves while demeaning the people who protect our country” in a post on the social media platform X Thursday night.

“If the people behind this decision had a shred of the courage that our veterans have, this cowardly and insulting idea would have been rejected immediately,” Houston’s post read. There were also several calls for resignations within the school’s administration attached to Houston’s post.

In an email to families Thursday night, the school’s principal, Rachael Webster, apologized and welcomed military family members to attend “in the attire that makes them most comfortable.”

“I recognize this request has caused harm and I am deeply sorry,” Webster’s email read, adding later that the school has the “utmost respect for what the uniform represents.”

Webster said the initial request was out of concern for some students who come from countries experiencing conflict and who she said expressed discomfort with images of war, including military uniforms.

Her email said any students who have concerns about seeing Armed Forces members in uniform can be accommodated in a way that makes them feel safe, but she provided no further details in the message.

Webster did not immediately respond to a request for comment.

At a news conference Friday, Houston said he’s glad the initial request was reversed but said he is still concerned.

“I can’t actually fathom how a decision like that was made,” Houston told reporters Friday, adding that he grew up moving between military bases around the country while his father was in the Armed Forces.

“My story of growing up in a military family is not unique in our province. The tradition of service is something so many of us share,” he said.

“Saying ‘lest we forget’ is a solemn promise to the fallen. It’s our commitment to those that continue to serve and our commitment that we will pass on our respects to the next generation.”

Liberal Leader Zach Churchill also said he’s happy with the school’s decision to allow uniformed Armed Forces members to attend the ceremony, but he said he didn’t think it was fair to question the intentions of those behind the original decision.

“We need to have them (uniforms) on display at Remembrance Day,” he said. “Not only are we celebrating (veterans) … we’re also commemorating our dead who gave the greatest sacrifice for our country and for the freedoms we have.”

NDP Leader Claudia Chender said that while Remembrance Day is an important occasion to honour veterans and current service members’ sacrifices, she said she hopes Houston wasn’t taking advantage of the decision to “play politics with this solemn occasion for his own political gain.”

“I hope Tim Houston reached out to the principal of the school before making a public statement,” she said in a statement.

This report by The Canadian Press was first published Nov. 8, 2024.

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Saskatchewan NDP’s Beck holds first caucus meeting after election, outlines plans

Published

5 days ago

November 8, 2024

Anne Joseph

REGINA – Saskatchewan Opposition NDP Leader Carla Beck says she wants to prove to residents her party is the government in waiting as she heads into the incoming legislative session.

Beck held her first caucus meeting with 27 members, nearly double than what she had before the Oct. 28 election but short of the 31 required to form a majority in the 61-seat legislature.

She says her priorities will be health care and cost-of-living issues.

Beck says people need affordability help right now and will press Premier Scott Moe’s Saskatchewan Party government to cut the gas tax and the provincial sales tax on children’s clothing and some grocery items.

Beck’s NDP is Saskatchewan’s largest Opposition in nearly two decades after sweeping Regina and winning all but one seat in Saskatoon.

The Saskatchewan Party won 34 seats, retaining its hold on all of the rural ridings and smaller cities.

This report by The Canadian Press was first published Nov. 8, 2024.

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Nova Scotia election: Liberals say province’s immigration levels are too high

Published

6 days ago

November 7, 2024

Anne Joseph

HALIFAX – Nova Scotia‘s growing population was the subject of debate on Day 12 of the provincial election campaign, with Liberal Leader Zach Churchill arguing immigration levels must be reduced until the province can provide enough housing and health-care services.

Churchill said Thursday a plan by the incumbent Progressive Conservatives to double the province’s population to two million people by the year 2060 is unrealistic and unsustainable.

“That’s a big leap and it’s making life harder for people who live here, (including ) young people looking for a place to live and seniors looking to downsize,” he told a news conference at his campaign headquarters in Halifax.

Anticipating that his call for less immigration might provoke protests from the immigrant community, Churchill was careful to note that he is among the third generation of a family that moved to Nova Scotia from Lebanon.

“I know the value of immigration, the importance of it to our province. We have been built on the backs of an immigrant population. But we just need to do it in a responsible way.”

The Liberal leader said Tim Houston’s Tories, who are seeking a second term in office, have made a mistake by exceeding immigration targets set by the province’s Department of Labour and Immigration. Churchill said a Liberal government would abide by the department’s targets.

In the most recent fiscal year, the government welcomed almost 12,000 immigrants through its nominee program, exceeding the department’s limit by more than 4,000, he said. The numbers aren’t huge, but the increase won’t help ease the province’s shortages in housing and doctors, and the increased strain on its infrastructure, including roads, schools and cellphone networks, Churchill said.

“(The Immigration Department) has done the hard work on this,” he said. “They know where the labour gaps are, and they know what growth is sustainable.”

In response, Houston said his commitment to double the population was a “stretch goal.” And he said the province had long struggled with a declining population before that trend was recently reversed.

“The only immigration that can come into this province at this time is if they are a skilled trade worker or a health-care worker,” Houston said. “The population has grown by two per cent a year, actually quite similar growth to what we experienced under the Liberal government before us.”

Still, Houston said he’s heard Nova Scotians’ concerns about population growth, and he then pivoted to criticize Prime Minister Justin Trudeau for trying to send 6,000 asylum seekers to Nova Scotia, an assertion the federal government has denied.

Churchill said Houston’s claim about asylum seekers was shameful.

“It’s smoke and mirrors,” the Liberal leader said. “He is overshooting his own department’s numbers for sustainable population growth and yet he is trying to blame this on asylum seekers … who aren’t even here.”

In September, federal Immigration Minister Marc Miller said there is no plan to send any asylum seekers to the province without compensation or the consent of the premier. He said the 6,000 number was an “aspirational” figure based on models that reflect each province’s population.

In Halifax, NDP Leader Claudia Chender said it’s clear Nova Scotia needs more doctors, nurses and skilled trades people.

“Immigration has been and always will be a part of the Nova Scotia story, but we need to build as we grow,” Chender said. “This is why we have been pushing the Houston government to build more affordable housing.”

Chender was in a Halifax cafe on Thursday when she promised her party would remove the province’s portion of the harmonized sales tax from all grocery, cellphone and internet bills if elected to govern on Nov. 26. The tax would also be removed from the sale and installation of heat pumps.

“Our focus is on helping people to afford their lives,” Chender told reporters. “We know there are certain things that you can’t live without: food, internet and a phone …. So we know this will have the single biggest impact.”

The party estimates the measure would save the average Nova Scotia family about $1,300 a year.

“That’s a lot more than a one or two per cent HST cut,” Chender said, referring to the Progressive Conservative pledge to reduce the tax by one percentage point and the Liberal promise to trim it by two percentage points.

Elsewhere on the campaign trail, Houston announced that a Progressive Conservative government would make parking free at all Nova Scotia hospitals and health-care centres. The promise was also made by the Liberals in their election platform released Monday.

“Free parking may not seem like a big deal to some, but … the parking, especially for people working at the facilities, can add up to hundreds of dollars,” the premier told a news conference at his campaign headquarters in Halifax.

This report by The Canadian Press was first published Nov. 7, 2024.

— With files from Keith Doucette in Halifax

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