While most economists accept that there is some trade-off between unemployment and inflation, no one really knows how low unemployment can fall before wages begin to rise at a faster pace.
The top 1% of individual taxpayers receive almost all of the benefit of the stock options deduction and 87.4% of the benefit of the capital gains deduction.
What we need is higher productivity in low wage industries, and a higher minimum wage floor will help to do the job.
This well-known story of declining real earnings of younger workers is seemingly inconsistent with a story of increasing family incomes of children relative to their parents.
Given the huge imbalance, this would likely require more managed trade plus more proactive Canadian industrial policies. As a planned economy, China might be open to sectoral managed trade arrangements.
In this new age of corporate concentration, we certainly need a much broader response than competition policy alone.
The innovation agenda marks another incremental turn away from “framework” economic development policies. But the shift is unlikely to be transformational unless it is scaled up and accompanied by a greater role for long-term public investment.
A necessary prerequisite for restoring Western democratic capitalism, and even more so social democracy or democratic socialism, is to force the genie of finance back into its bottle.
Our trade situation was a serious problem long before the election of Donald Trump and new realities will demand a serious re-thinking of the liberal trade and industrial policies of the “free trade” era and not just more of the same.
