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JOSH LAUGHREN: No green recovery without blue economy, and no blue economy without fish – SaltWire Network

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JOSH LAUGHREN

As the federal government prepares the throne speech for Sept. 23, Prime Minister Justin Trudeau has rightly emphasized the importance of planning for a green and just recovery from the COVID-19 crisis. The $32-billion “blue economy” — our oceans — must be part of this strategy.  

The pandemic, climate change, habitat destruction and persistent overfishing have made it more urgent than ever that we invest in our oceans as the Earth’s most important life-support system. Canada now has a unique and powerful opportunity to make our oceans part of a sustainable recovery from COVID-19.  

According to government figures, the oceans are a source of approximately 350,000 jobs in Canada — often in communities with few other employment options. The term “blue economy” is a flexible one that can include almost anything related to the ocean: energy, shipping, tourism, recreation, aquaculture, transmission cables and much more. But now, more than ever before, we cannot afford to ignore the original and still vital foundation of the blue economy: wild fish to support the domestic seafood industry.   

Canada’s fisheries have been severely depleted over many decades, to the point where Oceana Canada’s latest fishery audit shows that only about a quarter of them can confidently be considered healthy. The value of Canada’s wild-caught seafood is dominated by a few shellfish species like lobster, crab and shrimp, leaving little room for error. And the situation is not improving. Our annual audits show that the overall health of Canada’s fish stocks continue to decline. The number of healthy populations has decreased from 2017 to 2020, despite new investments in science and management. 

The outcomes of Canada’s current approach to fisheries management has real costs for Canadians and coastal communities. A recent study by Rashid Sumaila and Louise Teh at the University of British Columbia, commissioned by Oceana Canada, showed rebuilding fisheries can deliver long-term economic and social gains for five of the six high-valued stocks they studied. The most optimistic scenario estimated a gain of 11 times more economic value than today. As we have seen from examples all over the world, wild fish populations will usually rebound if we just give them a chance. Failure to do so represents a massive loss for future generations. 

There is reason for hope. Successive governments under the leadership of Trudeau have restored funding to fisheries science, improved the transparency of fisheries data and greatly increased the amount of marine habitat protected. And the modernized Fisheries Act, which became law last year, requires depleted fish stocks to be rebuilt. But laws are only effective if implemented, and so far, the regulations needed to support the act have not been completed.  

Trudeau and the minister of Fisheries, Oceans and the Canadian Coast Guard, Bernadette Jordan, have stated that the blue economy is essential for Canada’s economic recovery. In fact, it is so important it is at the top of the fisheries minister’s mandate letter. Just two months into the pandemic, Trudeau urged us all to “buy Canadian” to “help the people who keep food on our plates,” as his government invested $470 million to help fisheries recover. But you can’t buy Canadian fish if there are no fish to catch. And in many communities along all three coasts, without fish to catch there will be no long-term recovery. 

This throne speech and new mandate will be a watershed moment in Canadian history. Canada’s deputy prime minister and newly minted minister of finance recently said that our country’s economic recovery needs to be green, equitable, inclusive and focused on jobs and growth. We agree.  

There is no green recovery without a blue economy, and no blue economy without fish. 

Josh Laughren is the executive director of Oceana Canada, an independent charity established to restore Canadian oceans to be as rich, healthy, and abundant as they once were.

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Only state investment can revive Britain's zombie economy – The Guardian

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Only state investment can revive Britain’s zombie economy  The Guardian



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Trump’s Biggest Economic Legacy Isn’t About the Numbers – The New York Times

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BETHLEHEM, Pa. — To understand how much President Trump has altered the conversation around the economy, just listen to Bruce Haines, who spent decades as an executive at U.S. Steel before becoming a managing partner of the elegant Historic Hotel Bethlehem.

The steel mills that still dominate Bethlehem’s skyline have long been empty. And now, so are the tables in the Tap Room, the hotel’s restaurant, a sign of the economic hardship caused by the coronavirus pandemic. “It’s been very difficult,” Mr. Haines said.

The president’s management of the pandemic is a prime reason many voters cite for backing his opponent. But Mr. Haines, who lives in a swing county in a swing state, is struck most by a different aspect of Mr. Trump’s record.

“I spent 35 years in the steel business and I can tell you unfair trade deals were done by Republicans and Democrats,” Mr. Haines said. Both parties, he complained, had given up on manufacturing — once a wellspring of stable middle-class jobs. “Trump has been the savior of American industry. He got it. He’s the only one.”

Bruce Haines, co-owner of Hotel Bethlehem, said the business has lost 40 percent of its income because it is unable to host large events and gatherings.
Credit…Hannah Yoon for The New York Times

In perhaps the greatest reversal of fortune of the Trump presidency, a microscopically tiny virus upended the outsize economic legacy that Mr. Trump had planned to run on for re-election. Instead of record-low unemployment rates, supercharged confidence levels and broad-based gains in personal income, Mr. Trump will end his term with rising poverty, wounded growth and a higher jobless rate than when he took office.

Still, despite one of the worst years in recent American history, the issue on which Mr. Trump gets his highest approval ratings remains the economy. It points to the resilience of his reputation as a savvy businessman and hard-nosed negotiator. And it is evidence that his most enduring economic legacy may not rest in any statistical almanac, but in how much he has shifted the conversation around the economy.

Long before Mr. Trump appeared on the political stage, powerful forces were reshaping the economy and inciting deep-rooted anxieties about secure middle-income jobs and America’s economic pre-eminence in the world. Mr. Trump recognized, stoked and channeled those currents in ways that are likely to persist whether he wins or loses the election.

By ignoring economic and political orthodoxies, he at times successfully married seemingly contradictory or inconsistent positions to win over both hard-core capitalists and the working class. There would be large tax breaks and deregulation for business owners and investors, and trade protection and aid for manufacturers, miners and farmers.

In the process, he scrambled party positions on key issues like immigration and globalization, and helped topple sacred verities about government debt. He took a Republican Party that preached free trade, low spending and debt reduction and transformed it into one that picked trade wars even with allies, ran up record-level peacetime deficits and shielded critical social programs from cuts.

Credit…Mark Makela for The New York Times

“He completely moved the Republican Party away from reducing Social Security and Medicare spending,” said Michael R. Strain, an economist at the conservative American Enterprise Institute.

On immigration, Mr. Trump remade the political landscape in a different way. He has accused immigrants of stealing jobs or committing crimes and — as he did in Thursday night’s debate — continued to disparage their intelligence. In doing so, he rallied hard-line sentiments that could be found in each party and turned them into a mostly Republican cri de coeur.

The Democrats changed in turn. Former Vice President Joseph R. Biden Jr. has positioned himself as the champion of immigrants, pledging to reverse Mr. Trump’s most restrictive policies, while rejecting more radical proposals like eliminating the Immigration and Customs Enforcement agency.

He has also been pushed to finesse his position on fracking and the oil industry, promising not to ban the controversial drilling method on private lands, and trying — with mixed success — to walk back comments he had made during the presidential debate about transitioning away from fossil fuels.

Shifts on trade were more momentous. Mr. Biden and other party leaders who had once promoted the benefits of globalization found themselves playing defense against a Republican who outflanked them on issues like industrial flight and foreign competition. They responded by embracing elements of protectionism that they had previously abandoned.

No matter who spends the next four years in the White House, economic policy is likely to pay more attention to American jobs and industries threatened by China and other foreign competition and less attention to worries about deficits caused by government efforts to stimulate the economy.

The reshuffling is clear to Charles Jefferson, the managing owner of Montage Mountain Ski Resort near Scranton, Pa.

“Those were not conversations we were having five years ago,” he said. “The exodus of manufacturing jobs, that was considered a fait accompli.”

Mr. Jefferson, 55, grew up in North Philadelphia in a blue-collar union family and remembers the hemorrhaging of jobs that many Democratic leaders said was unstoppable in a globalized world — even though such positions were deeply unpopular with many rank-and-file Democrats.

Manufacturing revived after bottoming out during the Great Recession but floundered during President Barack Obama’s second term. Mr. Jefferson, who said he voted for Mr. Obama, supported Mr. Trump in 2016. He plans to do so again.

Credit…Doug Mills/The New York Times

The sector still represents a relatively small slice of the economy, accounting for 11 percent of the country’s total output and employing less than 9 percent of American workers. But Mr. Trump has been a relentless cheerleader. While he often took credit for manufacturing jobs at companies like General Motors and Foxconn that later disappeared or never materialized, the pace of hiring in the sector sped up considerably in 2018 before stalling out last year.

As a result, in this election, unlike the last, the significance of manufacturing and the need for a more skeptical approach to free trade are not contested.

Mr. Biden, after decades of supporting trade pacts, is now running on a “made in all of America” program that promises to “use full power of the federal government to bolster American industrial and technological strength.” He has also vowed to use the tax code to encourage businesses to keep or create jobs on American soil.

Even voters who don’t particularly like Mr. Trump credit him with re-energizing the U.S. economy.

Walter Dealtrey Jr., who runs a tire service, sales and retreading business in Bethlehem that his father started 65 years ago, said he voted for Mr. Trump in 2016, but he was never a big fan of the president.

Credit…Hannah Yoon for The New York Times

“He talks too much,” said Mr. Dealtrey, who’s been around long enough to distinguish a new Goodyear or Michelin tire by its smell. “And his tone is terrible.” A year ago, he had considered the possibility of supporting a moderate Democrat like Mr. Biden or Senator Amy Klobuchar of Minnesota.

But with Election Day just over a week away, Mr. Dealtrey plans to once again support the president. Even after a few unnervingly slow months in the spring and some layoffs among the 960 people he employed at his company, Service Tire Truck Centers, he stills trusts Mr. Trump on the economy.

Mr. Dealtrey talked as he walked around stacks of giant tires that towered above his own six-foot frame, a Stonehenge-size monument to wheeled transport. He likes the president’s focus on “big manufacturing” and the way he “instills confidence in businesses to invest in this country.”

Just how much responsibility Mr. Trump deserves for reframing some key economic issues is up for debate. Frustration about job losses in the United States has been brewing for decades; the parties were diverging on immigration; and antagonism toward China over trade practices, suspicions of technology theft and its authoritarian tactics extends beyond the United States.

Credit…Ruth Fremson/The New York Times

“I don’t think he really has pushed the boundaries of any of those policy issues beyond where they already were,” said Mr. Strain of the American Enterprise Institute.

Similarly, Jason Furman, a chairman of the Council of Economic Advisers during the Obama administration, argues that Mr. Trump was pushed along by the same trends and forces that spurred his supporters. And on some issues, like immigration, he caused public opinion to move in the opposite direction.

In the end, it may turn out that the president’s most significant impact on economic policy is not one that he intended: overturning the conventional wisdom about the impact of government deficits.

By simultaneously pursuing steep tax cuts for businesses and wealthy individuals, raising military spending and ruling out Medicare and Social Security reductions, Mr. Trump presided over unprecedented trillion-dollar deficits. Emergency pandemic relief added to the bill. Such sums were supposed to cause interest rates and inflation to spike and crowd out private investment. They didn’t.

“Trump has done a lot to legitimize deficit spending,” Mr. Furman said.

Mr. Furman is one of a growing circle of economists and bankers who have called for Washington to let go of its debt obsession. Investing in infrastructure, health care, education and job creation are worth borrowing for, they argue, particularly in an era of low interest rates.

That doesn’t mean the issue has disappeared. Republicans will undoubtedly oppose deficits resulting from proposals put forward by a Democratic White House — and vice versa. But warnings about the calamitous consequences of federal borrowing are unlikely to have the same resonance as before the Trump presidency.

Back in his office, Mr. Dealtrey remembers how disturbed he once was about the size of the deficit. “I used to care about my kids and grandkids being stuck with it,” he said, leaning back in his chair. “But nobody cares anymore.”

“Maybe I don’t care anymore,” he said, momentarily surprised at his own words. “We’ve got bigger problems than that.”

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How Trump’s and Biden’s Tax Plans Will Help or Hurt the Economy’s Recovery – Barron's

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While political rivals are forecasting economic devastation if former Vice President Joe Biden were to raise taxes on the wealthy and corporations, many economists and tax analysts who have modeled outcomes have a different take.

The net effect of Biden’s proposals, when analyzed independently of spending and economic policies, would be negative economic growth ranging from -0.16% to -1.62% over the next 10 years, according to analyses by the American Enterprise Institute and Tax Foundation.

Slowed growth is attributed to higher taxes on the very wealthy, and major changes to businesses taxation, including an increase in the corporate tax rate from 21% to 28%, a doubling of the tax rate on certain income earned by foreign subsidiaries of U.S. corporations, and elimination of a 20% deduction for owners of pass-through entities with income of more than $400,000.

But when factoring in spending and economic plans—including those for trade, immigration, education, housing, health care, and other policies—the outlook varies by scenario.

An analysis by Moody’s Analytics finds that if Biden wins and Democrats win a majority in both the Senate and the House and enact his plans, average annual economic growth would be 2.9% and average annual wage growth would be 0.9% through 2030.

Moody’s finds that some 18.6 million jobs would be created over Biden’s four-year term, and full employment would be reached in the second half of 2022. Full employment is typically defined as an unemployment rate under 5%. It is about 8% today.

In contrast, if President Donald Trump wins the election and Republicans win the majority in both houses of Congress, the economic picture dims: 10-year economic growth would average 2.4%, wages would grow by 0.7% over a decade, 11.2 million jobs would be created over four years, and full employment would be reached in 2024.

If Congress maintains its split majority, with Republicans dominating the Senate and the Democrats in the House, the economic outcomes will be similar whether Biden’s or Trump’s tax policies are in effect—though somewhat more favorable under Biden’s presidency, according to Moody’s.

Read more: Here’s How Much You Would Pay Under Biden’s and Trump’s Tax Plans

Analyses that compare the two candidates’ plans are handicapped by a lack of detail issued by Trump. For example, while he has stated that he supports a capital-gains tax cut, none of the analyses factor this in.

Generally speaking, however, capital-gains tax cuts don’t typically help the economy, says Garrett Watson, a senior policy analyst at the Tax Foundation. “There is no evidence that capital-gains tax cuts are growth-enhancing.”

Email: editors@barrons.com

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