Economy

Trump Is Killing the Economy Out of Spite – The New York Times

Published

4 years ago

October 8, 2020

Last year Donald Trump called Nancy Pelosi, the House speaker, a “nasty, vindictive, horrible person.” Actually, she isn’t — but he is.

Trump’s vindictiveness has become a major worry as the election approaches. He has already signaled that he won’t accept the result if he loses, which seems increasingly likely though not certain. Nobody knows what chaos, possibly including violence, he may unleash if the election doesn’t go his way.

Even aside from that concern, however, a defeated Trump would still be president for two and a half months. Would he spend that time acting destructively, in effect taking revenge on America for rejecting him?

Well, we got a preview of what a lame-duck Trump presidency might look like Tuesday. Trump hasn’t even lost yet, but he abruptly cut off talks on an economic relief package millions of Americans desperately need (although as of Thursday he seemed to be backtracking). And his motivation seems to have been sheer spite.

Why do we need economic relief? Despite several months of large employment gains, America has only partly recovered from horrific job losses in the early months of the pandemic — and the pace of recovery has slowed to a relative crawl. All indications are that the economy will remain weak for many months, maybe even years.

Given this grim reality, the federal government should still be providing the kind of relief it offered in the first few months of the crisis: generous aid to the unemployed and loans that help keep small businesses afloat. Otherwise we’ll soon be seeing millions of families unable to pay their rent, hundreds of thousands of businesses going under.

In addition, state and local governments — which, unlike the federal government, are generally required to balance their budgets — are in desperate fiscal straits, because the pandemic slump has drastically reduced their revenues. They need a lot of aid, soon, or they will be forced into deep cuts in employment and services. We’ve already lost around 900,000 jobs in state and local education.

So there’s an overwhelming humanitarian case for major spending on relief: Unless the federal government steps in, there will be huge unnecessary suffering. There’s also a macroeconomic case: If families are forced to slash consumption, if businesses are forced to close and if state and local governments are forced into extreme spending cuts, the economy’s growth will slow and we might even slide back into recession.

I know, I know, the usual suspects will say that the calls for economic relief are just more big-government liberalism. But warnings about the dangers of failing to provide more relief aren’t just coming from progressive Democrats; they’re coming from Wall Street analysts and Jerome Powell, the chairman of the Federal Reserve.

Yet negotiations over relief have been stalled for months, even as special aid to the unemployed and small businesses has expired. The main stumbling block, I’d argue, has been the adamant refusal of Senate Republicans to consider aid to state and local governments; Democrats would probably have agreed to a deal that included significant aid, even though it would have helped Trump politically.

But Republicans have insisted — falsely — that this is all about rescuing badly run blue states. And Trump echoed that falsehood as he pulled the plug on Tuesday, claiming that Pelosi’s proposals are nothing but a bailout of “high crime, poorly run, Democrat States.” (Not that facts matter, but Democratic states actually have lower crime rates, on average, than Republican states.)

The question is, why did Trump choose to reject even the possibility of a deal less than a month before Election Day? True, it’s too late for legislation to make much difference to the state of the economy on Nov. 3, although a deal might have averted some corporate layoffs. But it would surely be in Trump’s political interest to at least look as if he’s trying to help Americans in distress. Why would Trump choose this, of all moments, to torpedo economic policy?

As far as I can tell, nobody has offered a plausible political motive, any way in which refusing even to try rescuing the economy helps Trump’s prospects. What this looks like, instead, is vindictiveness.

I don’t know whether Trump expects to lose the election. But he’s already acting like a deeply embittered man, lashing out at people he feels have treated him unfairly, which is basically everyone. And as usual he reserves special rage for smart, tough women; on Thursday he called Kamala Harris a “monster.”

Yet getting a relief deal would have required accepting a compromise with that “nasty” woman Nancy Pelosi. And it seems that he would rather let the economy burn.

The thing is, if he’s behaving like this now, when he still has some chance of winning, how will he act if he loses?

The most immediate concern is that he won’t accept the election results. But we should also be worried about what will follow if he is forced to accept the will of the people, but is still running the country. Trump has always been vindictive; what will he do if and when he has nothing left but spite?

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Economy

Canada’s unemployment rate holds steady at 6.5% in October, economy adds 15,000 jobs

Published

2 days ago

November 8, 2024

Anne Joseph

OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.

Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.

Business, building and support services saw the largest gain in employment.

Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.

Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.

Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.

Friday’s report also shed some light on the financial health of households.

According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.

That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.

People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.

That compares with just under a quarter of those living in an owned home by a household member.

Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.

That compares with about three in 10 more established immigrants and one in four of people born in Canada.

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

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Economy

Health-care spending expected to outpace economy and reach $372 billion in 2024: CIHI

Published

3 days ago

November 6, 2024

Anne Joseph

The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.

The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.

CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.

This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.

While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.

Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.

The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.

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

Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.

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Economy

Trump’s victory sparks concerns over ripple effect on Canadian economy

Published

4 days ago

November 6, 2024

Anne Joseph

As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.

Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.

A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.

More than 77 per cent of Canadian exports go to the U.S.

Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.

“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.

“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”

American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.

It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.

“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.

“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”

A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.

Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.

“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.

Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.

With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”

“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.

“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”

This report by The Canadian Press was first published Nov. 6, 2024.

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