Opinion
COVID-19 recession: why traditional economic tools will not restore job losses
By Ken McFarlane and Ian Waddell February 4, 2021
The neoliberal notion of handing out money, free land and tax exemptions to start-up, small and medium sized businesses is now completely discredited. Instead, a focused industrial strategy based on advanced manufacturing is the future.
The Bank of Canada has lowered interest rates with the hope that this will cause consumers to borrow and spend more resulting in businesses expanding and hiring additional workers to satisfy increased demand. However, once a major recession is underway most people are too poor to spend or borrow no matter how low interest rates are. Banks can become unwilling to lend as personal credit scores tumble and personal savings are depleted, write Ken McFarlane and Ian Waddell. The Hill Times photograph by Andrew Meade
At every Canadian election, federal or provincial politicians promise to create more jobs. Easier said than done at the best of times. The current COVID-19 recession adds unique elements to the challenge.
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