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What to do about the financial crisis

Tax cuts, deregulation, privatization and cuts to public spending will make the economic situation much worse.

The Canadian economy and public sector will not be immune to the global financial mess - Toby Sangerby Toby Sanger, CUPE senior economist

October 7, 2008 — The world's financial markets are going through an incredible period of turmoil and crisis. It is now widely acknowledged that this is the worst since the Great Depression in the 1930s.

In the United States, major investment banks, mortgage companies, insurers and main street banks have collapsed or been taken over. Large banks have failed in the UK. In the past week, the Irish, Greek, German and Danish governments have all come to the rescue of their banks with a guarantee of all deposits. In Iceland the government recently seized control of the country's largest banks, which had become an offshore financial haven, in an attempt to prevent economic collapse.

And the situation is expected to get worse. The economies of most industrialized countries in North America and Europe are now expected to descend into a recession over the next few years.

Widespread investment in rotten or "toxic" financial products and growing financial and economic uncertainty and pessimism has resulted in a credit crunch, making it increasingly difficult for many businesses, people and even governments to borrow money. While this credit crunch isn't the underlying cause of the downturn, it will accelerate it and make it deeper and more widespread.

The Canadian economy and our public sector employers will not be immune to these problems. Many people have already seen steep declines in the value of their pensions and investments. Private sector employers will face cutbacks, spending and employment and investment will decline in some areas and governments will face slowdowns or drops in their revenues.

These economic problems did not just appear in the last few weeks or over the past year. They have been developing for a long time and have deep roots. . .

Links and sources
  What to do about the financial crisis, by Toby Sanger, posted on CUPE website October 7, 2008

Posted: October 08, 2008

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