Canada is headed for a 'severe' and 'almost inevitable' recession in early 2023, according to the head of economics at Macquarie Group, which states Canada will face an approximately three per cent contraction in gross domestic product and a five per cent rise in its unemployment rate during the predicted recession.
Huh. So that was a lot of words that explained absolutely nothing. But I do wonder what caused this bullshit?
Obviously the pandemic didn’t help things but I’m pretty sure a lot of it has to do with a war happening in another continent…
Well at least my stepfather will be happy, he wants a recession. I don’t think I’ve ever lived through one so this’ll be interesting (I.e. horrible).
Can someone smarter than me and educated in economic things explain what the hell is going on. This kinda stuff just never made sense to me. I know it’s bourgeoisie being what they are and exploiting the proletariat, but I’m confused on logistics? How do they justify inflation and then a recession? Is there anyway we can stop this?
Being a Canadian is making me flip flop between being hopeful for change but also hopeless.
Long story short is that we’re seeing accumulation of problems created by many decades of capitalism come to the culminating point where the system is becoming unstable.
What caused this bullshit is capitalist class in Canada exploiting the majority and hoarding majority of the wealth created through labor of Canadian workers. This creates a situation where most people are barely making their ends meet. This is obviously an unstable situation that can easily turn into an economic crisis whenever there’s a chance event that destabilizes the system.
We see this happen roughly once a decade with 2000 economic crash, 2008 crash, and now the current crash. Every time a crash occurs there’s an accelerated wealth transfer to the top because a lot of people end up going insolvent allowing big capitalists to buy up their assets. This further reduces the margins putting more and more people in a precarious financial situation.
Meanwhile, the banks in Canada use two levers to attempt and control economic crises. First is to raise interest rates and the second is to print money. Raising rates cools the economy because it makes it more prohibitive to borrow and printing money causes inflation because it devalues the currency.
Basically, when the banks raise rates or print money they’re externalizing the problem into the future. What we’re seeing now is a situation where the power of both of these levers has been exhausted. Raising the rates will lead to a deep recession and printing more money will create unacceptable levels of inflation which ultimately will lead us to a recession anyways.
The way things are going I expect that we’ll start seeing social unrest in Canada before long. Cost of living is now rapidly rising, but the wages are remaining stagnant. As the article above points out, over half the people back in 2017 couldn’t afford an unexpected $200 expense. That means large numbers of people will end up going insolvent, losing their savings, and ending up on the street leading to social unrest.
We’re also starting to see labour organization happening with people forming unions, doing strikes, and refusing to work for poverty wages. Traditionally this leads to labor becoming militant and starting to take on the system. This happened in both US and Canada back in the 1930s where there were mass strikes, riots, and protests.
Holy shit, thank you so much for taking the time to explain all of this! Economics just seems purposefully complex to me and yet you illustrated it for me to understand.
This also reminds me that I saw something today about how businesses are going to start creating mass unemployment due to workers wanting respect, and because of the manufactured mass unemployment it’ll make people desperate for a job even if it pays poverty wages. I believe the video was talking about the US specifically but it would probably apply to Canada as well considering we’re so linked, and not just geographically.
I’m hoping this will help more people gain class consciousness. As someone on provincial disability aid inflation has hit HARD. Many disabled people have been vocal about all these problems but now that it’ll start affecting even more people directly and in their face we will hopefully see some sort of change.
No problem, glad that was helpful. And yeah, creating a more desperate work force is how they want to address the economic crisis. This is what Marx referred to as the reserve army of labour. Capitalist society requires unemployment to keep worker demands down.
We’re definitely seeing people develop more class consciousness now, and conversations about socialism are starting to move into the mainstream Overton window. One bright example is CUPE having record unionizaiton drive this summer. Unions are the first step towards having organized labour.
Huh. So that was a lot of words that explained absolutely nothing. But I do wonder what caused this bullshit?
Obviously the pandemic didn’t help things but I’m pretty sure a lot of it has to do with a war happening in another continent…
Well at least my stepfather will be happy, he wants a recession. I don’t think I’ve ever lived through one so this’ll be interesting (I.e. horrible).
Can someone smarter than me and educated in economic things explain what the hell is going on. This kinda stuff just never made sense to me. I know it’s bourgeoisie being what they are and exploiting the proletariat, but I’m confused on logistics? How do they justify inflation and then a recession? Is there anyway we can stop this?
Being a Canadian is making me flip flop between being hopeful for change but also hopeless.
Long story short is that we’re seeing accumulation of problems created by many decades of capitalism come to the culminating point where the system is becoming unstable.
What caused this bullshit is capitalist class in Canada exploiting the majority and hoarding majority of the wealth created through labor of Canadian workers. This creates a situation where most people are barely making their ends meet. This is obviously an unstable situation that can easily turn into an economic crisis whenever there’s a chance event that destabilizes the system.
We see this happen roughly once a decade with 2000 economic crash, 2008 crash, and now the current crash. Every time a crash occurs there’s an accelerated wealth transfer to the top because a lot of people end up going insolvent allowing big capitalists to buy up their assets. This further reduces the margins putting more and more people in a precarious financial situation.
Meanwhile, the banks in Canada use two levers to attempt and control economic crises. First is to raise interest rates and the second is to print money. Raising rates cools the economy because it makes it more prohibitive to borrow and printing money causes inflation because it devalues the currency.
Basically, when the banks raise rates or print money they’re externalizing the problem into the future. What we’re seeing now is a situation where the power of both of these levers has been exhausted. Raising the rates will lead to a deep recession and printing more money will create unacceptable levels of inflation which ultimately will lead us to a recession anyways.
The way things are going I expect that we’ll start seeing social unrest in Canada before long. Cost of living is now rapidly rising, but the wages are remaining stagnant. As the article above points out, over half the people back in 2017 couldn’t afford an unexpected $200 expense. That means large numbers of people will end up going insolvent, losing their savings, and ending up on the street leading to social unrest.
We’re also starting to see labour organization happening with people forming unions, doing strikes, and refusing to work for poverty wages. Traditionally this leads to labor becoming militant and starting to take on the system. This happened in both US and Canada back in the 1930s where there were mass strikes, riots, and protests.
Holy shit, thank you so much for taking the time to explain all of this! Economics just seems purposefully complex to me and yet you illustrated it for me to understand.
This also reminds me that I saw something today about how businesses are going to start creating mass unemployment due to workers wanting respect, and because of the manufactured mass unemployment it’ll make people desperate for a job even if it pays poverty wages. I believe the video was talking about the US specifically but it would probably apply to Canada as well considering we’re so linked, and not just geographically.
I’m hoping this will help more people gain class consciousness. As someone on provincial disability aid inflation has hit HARD. Many disabled people have been vocal about all these problems but now that it’ll start affecting even more people directly and in their face we will hopefully see some sort of change.
No problem, glad that was helpful. And yeah, creating a more desperate work force is how they want to address the economic crisis. This is what Marx referred to as the reserve army of labour. Capitalist society requires unemployment to keep worker demands down.
We’re definitely seeing people develop more class consciousness now, and conversations about socialism are starting to move into the mainstream Overton window. One bright example is CUPE having record unionizaiton drive this summer. Unions are the first step towards having organized labour.