Canadian workers have suffered somewhat higher unemployment rates than
American in part because, until recently, Canada's monetary policy was
much tighter than American. At the moment, our fiscal policy has also
been much tighter with huge government surplusses over the last decade
and lesser tax cuts. On the other hand, Canadian unions have remained
considerably stronger (cf the recent changes in the auto industry) and
the welfare state, though under attack, has proved I think more
resiliant than in the US, perhaps best epitomised by medicare despite
the right wing attacks on it. So to answer Doug, unemployment has
probably been higher due to monetary and fiscal policy, perhaps by 1 per
cent or so, but this has probably been somewhat offset by the other
factors he mentioned (to which I concur.)
Paul P
Doug Henwood wrote:
Julio Huato wrote:
Moreover, IMO, *in and by itself* a hawkish monetary policy doesn't
necessarily imply an overall contractionary economic policy or an
enrich-the-rich redistributive policy.
Yeah, I agree with this. Except in extreme instances like the Volcker
crackdown - which was part of a larger ruling class crackdown -
monetary policy is a lot less important to the distribution of income
than other institutional factors, like union strength, the welfare
state, and the patterns of government spending. I'd say the converse
is even more true - that loose monetary policy has few if any
long-term beneficial effects.
As for Canada - are Canadian workers really any worse off than their
American counterparts, despite the hawkishness at the Bank of Canada?
No one can say that Greenspan has run a tight ship in the US for most
of the last 18 years.
Doug
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