There is great news from the Bank of Canada this week.
The recession is over. After a fierce battle to save the economy from rack and ruin, the central bank announced victory on Thursday, which according to Globe and Mail market columnist Steve Ladurantaye was “a good day to declare an end to the Great Recession” because “markets across North America rallied enthusiastically as economic data and corporate earnings gave investors a renewed sense of purpose”.
Now, in case I sound irreverent about this great moment in Canadian financial history, let me just say here that I’m glad my mum’s pension fund might recover from the hit it took when the money magicians did whatever it was they did last year and all the balls fell to the ground. I don’t for a minute claim to understand what’s been going on with the world’s valuable reserves of cash, and I’m deeply suspicious of anyone who does, but you have to wonder about the indicators we use to measure success and failure.
According to Ladurantaye, “The Dow Jones industrial average closed above 9,000 for the first time since January - up 2.12 per cent, or 188.03 points, to 9,069.29. The broader S&P 500 gained 2.33 per cent, or 22.22 points, to 976.29.” He offers similar gibberish on the subject of something called the Nasdaq. To describe the language of the stock market as esoteric would be to understate the case by somewhat more than 2.33 per cent, or 22.22 points. In fact, nobody on the outside has a clue what they’re talking about. Can this be an accident?
Buried in the jargon there is one detail that’s easy enough to understand. Ladurantaye tells us that US markets, which Canadian markets follow like the scent of money, “were powered by a housing report that showed sales were increasing, even though many of the sales were the result of foreclosures.”
So to round up, the Bank of Canada is announcing the end of the recession because a misreading of US housing statistics has led to a buying spree on the stock market. It’s a case of the salvation of the many by the stupidity of the few. But how long can our salvation last? What if next week the stock brokers all wake up and smell the foreclosures? They may go on a selling spree, bust the economy, and send the world back into recession again. The question is, will anybody outside of the money streets notice?
Even Maclean’s magazine notes that the news “wasn’t all rosy: the report says the uptick in unemployment will continue.” Isn’t language great? When corporate profits suffer, that’s a recession. When tens of thousands of workers lose their jobs, that’s an uptick. It makes joining the jobless sound like a good thing. You’re not unemployed anymore, you’re certainly not redundant. You’re upticked. You’re not sitting around on the dole watching soap operas. You probably weren’t eligible. So you’re on the way up, ticking along like a clockwork toy searching for part-time, fast-food jobs.
It should come as no surprise that the recession is officially over. All of the big corporations that mismanaged their affairs to the tune of billions have been bailed out with money that won’t exist till our children are grey, so who needs a recession anymore? As for unemployment, it was never the real issue, though of course joblessness must be controlled. It’s crucial to a well-run economy that the right percentage of the work force be unemployed at any given time. Too few and the cost of labour goes up, too many and consumerism goes down. Either way, the economy, also known as the corporate profits, suffers.
The best part about the end of the recession is that it was achieved without making any structural changes in the way we run our economy. A bit of duct-tape over the holes in the credit system and it’s full speed ahead and damn the torpedoes. Never mind that almost the entire world economy is based on the bizarre notion that the resources will last forever and the planet will tolerate whatever we choose to do with it.
Forgive me if I fail to break out the banners and fireworks at the news of the recession’s demise. Last year, when the wizards finally confessed they’d flubbed the money spell and a recession was imminent, I allowed myself to fantasize that as we recovered we might take at least some faltering steps toward a sane and rational economy.
Silly me.
Al Pope won the 2002 Ma Murray Award for Best Columnist in BC/Yukon. His novel, Bad Latitudes,
is available in bookstores.