The Wall Street Journal reports that, "International Monetary Fund chief Dominique Strauss-Kahn said the world's advanced economies -- the U.S., Western Europe and Japan -- are 'already in depression,' and that the IMF could slash its global growth forecasts further. The 'worst cannot be ruled out,' he said."
BRITISH PM SAYS GLOBAL ECONOMY IN DEPRESSION "Last week, when British Prime Minister Gordon Brown used the word 'depression' to describe the global economy, his aides quickly said it was a slip of the tongue."
WHAT IS AN ECONOMIC DEPRESSION?
"Political figures generally avoid using the word depression because of the association with the Great Depression of the 1930s, when unemployment hit 25% in the U.S. and economic output fell even more steeply...Former IMF Chief Economist Simon Johnson, a professor at MIT's Sloan School of Management, said the term refers to a significant contraction that lasts around five years."
598,000 AMERICAN JOBS LOST
In January alone, the American workforce lost 598,000 jobs.
Bloomberg reports that, "The U.S. economy has lost 3.57 million jobs since a recession started in December 2007, its biggest employment slump of any economic contraction in the postwar period..."
President Barack Obama has noted that half of these 3.6 million job losses have come in the last three months. He says, "the problems are accelerating instead of getting better."
129,000 CANADIAN JOBS LOST
The Calgary Herald reports that, "Statistics Canada reported that 129,000 jobs were lost in January, almost all full-time positions and a record singe-month total."
IS 'PROTECTIONISM' A THREAT?
The Globe and Mail reports today that, "The World Trade Organization will step up monitoring of protectionist trade policies amid rising fears that nations will make the economic crisis worse by retreating from open markets - as they did during the Great Depression...The fear of policy makers and businessmen is that Washington - and others - may revert to the strategy employed at the beginning of the Great Depression, when the U.S. Smoot-Hawley Act of 1930 raised tariffs on thousands of goods to protect American businesses. The act led to worldwide retaliation and the devastation of international commerce."
But many economists would challenge this orthodoxy, say that this crisis indicates the need for profound systemic change, and additionally point to the job losses, growing inequality, and deep poverty that has come with years of free trade.
G8 SUMMIT IN ONTARIO
While it is still many months away, the Council of Canadians is starting to look ahead to the G8 leaders summit that will take place in Huntsville, Ontario on June 25-27, 2010. The G8 summit will be an occasion to demand that solutions be found and that free trade, deregulation, and privatization is not the answer, but rather the problem.
The Canwest News Service reported last June that, "On the agenda will be discussions about open markets and free trade, global action against climate change, and human rights, the prime minister indicated (in his announcement about the summit)."