False dichotomies

August 1, 2011


In process DRAFT

Polarized thinking, false choices, false dichotomies, either or thinking, primal thinking, false dilemma, black and white thinking)

Blumenthal, Paul. 2011-07-29. “Debt Limit Stalemate Has Roots In Campaign Money, Earmarks, Social Media.”

Timeline

2011-07-31 On National Public Radio last week, Rep. Tom Cole, a Republican deputy whip, was giddy about the potential for calamity. Asked if it was a mistake to try to cut spending by threatening the U.S. economy, Cole replied: “No, I don’t think so. Frankly, I think it’s one of the good things that’s come out of this. We’ll never have a debt-ceiling increase again without serious efforts to deal with the long-term spending (source).”

2011-07-18 A CNN Survey found that 64% of Americans supported spending cuts and tax increases. The question in the survey was worded: “In those discussions, several budget plans have been proposed that would reduce the amount the government owes by trillions of dollars over the next ten years. If you had to choose, would you rather see Congress and President Obama agree to a budget plan that only includes cuts in government spending, or a budget plan that includes a combination of spending cuts and tax increases on higher-income Americans and some businesses (source)?” 52% of Americans felt that President Obama acted responsibly in reply to the question: “Based on what you have read or heard about the discussions between Congress and Barack Obama on the debt ceiling, do you think Obama has or has not acted responsibly?” To the question: “Based on what you have read or heard about the discussions between Congress and Barack Obama
on the debt ceiling, do you think the Republicans in Congress have or have not acted responsibly?” 63% of Americans answered “No, have not 63%.” In response to the question regarding potential cuts in government spending and increasing taxes that have been suggested as part of the discussions on the debt ceiling. 66% opposed cutting federal subsidies to farmers; 68% opposed cutting pensions and benefits for retired government workers; 52% opposed cutting defense spending; 77% opposed cutting the amount the government spends on Medicaid; 77% opposed cutting the federal health program for the poor; 87% opposed cutting the amount the government spends on Medicare; 87% opposed cutting the federal health program for the elderly; 84% opposed cutting the amount the government spends on Social Security; 73% were in favor ncreasing the taxes paid by oil and gas companies by ending
federal subsidies for those businesses 73% 26% 1%
Increasing the taxes paid by businesses that own private jets 76% 23% *
Increasing the taxes paid by people who make more than
250 thousand dollars a year 73% 26%

2011-05-01 Republican is Michael Grimm, elected in November 2010 argued that Medicare was not sustainable. “What this debate has turned into is class warfare — let’s be honest about it,” he said. Lower taxes across the board would increase government revenue, he maintained, in the face of loud catcalls from those who pointed out that that economic theory has long since been discredited [. . .] We need a strong national defense.” (source).”

2011-04-11 President Obama called for allowing the Bush tax cuts to expire for individuals making $200,000 or more a year and couples making $250,000 or more. Some conservatives, such as Sen. Tom Coburn (R-Okla.) have voiced support for tax increases.

Who’s Who?

Representative Paul Ryan’s (R-WI) proposed a controversial budget plan which included a proposal to turn Medicare into a voucher-like system.

Speaker John Boehner (R-Ohio proposed a new debt limit to the Republicans. They required 216 votes.

Below is a snapshot of This group of Republicans votes against Speaker John Boehner’s proposed bill to raise the debt ceiling.

Michele Bachmann, Minnesota – The Tea Party stalwart and presidential candidate said she would not vote for any bill that raised the debt ceiling.

Paul Broun, Georgia – Elected in 2007, Broun has on several occasions referred to President Barack Obama as a “socialist.”

Jason Chaffetz, Utah – Chaffetz has staked out turf as a Tea Party-friendly conservative since being elected in 2008. He is weighing a primary challenge to Senator Orrin Hatch.

Chip Cravaack, Minnesota – A former Navy pilot, Cravaack was elected last year with Tea Party support but declined to join official Tea Party group in Congress.

Scott DesJarlais, Tennessee – A doctor first elected last year with Tea Party support, he had not held any previous elected office.

Trey Gowdy, South Carolina – Gowdy won election last year with Tea Party support after winning the Republican primary by accusing the incumbent of working too often with Democrats.

Tim Huelskamp, Kansas – Elected in 2010 with Tea Party support, Huelskamp was raised on a farm.

Tom Graves, Georgia – Won his seat in a special election last year with Tea Party support.

Tim Johnson, Illinois – Johnson has compiled a moderate voting record since he was elected in 2000.

Jim Jordan, Ohio – A leader of the party’s conservative wing, Jordan was first elected in 2006.

Steve King, Iowa – A veteran leader of the party’s social conservatives, he gained notoriety for saying Obama’s election would lead to radical Islamists “dancing in the streets.”

Connie Mack, Florida – Elected in 2004, Mack started an anti-tax freedom caucus while serving in the Florida House.

Tom McClintock, California – Elected in 2008, McClintock gained some national prominence when he ran for governor going up against movie-star Arnold Schwarzenegger in 2003.

Mick Mulvaney, South Carolina – Elected in the Republican wave in 2010, he is the first Republican to represent his district since 1883.

Ron Paul, Texas – A long-time favorite of groups that want to drastically shrink government, the presidential candidate said he would not vote for any legislation that raised the debt ceiling.

Tim Scott, South Carolina – A leader of the party’s freshman class, he is the first black American to win national office from South Carolina since the Civil War era.

Steve Southerland, Florida – Elected in 2010, Southerland is owner and president of a family funeral home business.

Rep. Joe Walsh (R-Ill.) won his seat in 8th Congressional District in Chicago’s north and northwest suburbs in an out-of-nowhere victory 2010-Fall. He accused President Obama of being a liar on the debt-ceiling issue. He maintained uses cable television and social media like Twitter to maintain a high level of visibility.

Joe Wilson, South Carolina – A veteran lawmaker best known for shouting “You lie!” at President Obama during the 2009 State of the Union address.
(Reporting by Andy Sullivan and Kim Dixon; editing by Anthony Boadle)


Who owns the $14.3tn debt?

US Government owes itself $4.6tn
Remaining $9.7tn owed to investors
They include banks, pension funds, individual investors, and state/local/foreign governments
China: $1.15 tn, Japan: $0.91tn, UK: $0.33tn
Deficit is annual difference between spending and revenue, $1.29tn in 2010

Source: US Treasury, May 2011 cited on BBC

America raised its debt ceiling 140 times since World War II without controversy.

2011-07-29The “Republican-controlled House of Representatives passed a stopgap bill by 218-210. Two hours later, the Democratic-controlled Senate voted to kill it by 59-41. The Senate, keen to have a deal in place before the markets open on Monday, with the potential for huge falls in share prices, is proposing a bill of its own scheduled to go to a vote on Sunday [. . .] The standoff between the Republicans and Democrats – the biggest ideological collision between the parties for decades – enters its final phase [. . .] The US stock market has just had its worst week for a year and Obama, in a Gallup poll published on Friday, saw his approval ratings drop to a new low, from 45% to 40%.” MacAskill, Ewen. 2011-07-31. “US debt crisis: Tea Party intransigence takes America to the brink.” Washington: The Observer.

2011-05 The US Treasury reported that the US Government has a debt of $14.3 trillion.

2011-04-18 “The influential credit-rating firm Standard & Poor’s which assigns ratings to guide investors on the risks involved in buying debt instruments changed its ratings of U.S. Treasury securities to “negative” from “stable” but left the overall rating as AAA. As a result the struggle intensified between President Obama’s Democratic administration and his Republican opponents in the House to get control over a nearly $1.4 trillion budget deficit and $14.27 trillion debt burden (Johnson, Steven C. 2011-04-18. “S&P threatens to cut U.S. credit rating on deficit.” New York: Reuters).” The U.S. debt cap was $14.294 trillion cap. The debt continues to rise. Probable causes include costs for health care, retirement and other so-called entitlement programs, and the interest on existing debt. The stock market response included:

The Dow Jones Industrial Average fell 140.24 points, or 1.14%, to 12201.59, its biggest decline in a month, after earlier tumbling almost 250 points. Stocks in Britain, Germany and France fell more than 2%, with most of the declines coming after the S&P news, and in early trading Tuesday, Japan shares fell 1%. Gold surged to just below $1,500 an ounce.

Source: U.S. Warned on Debt Load

2011-01 A U.S. congressional report entitled “The Financial Crisis Inquiry Report 2011-01” blamed ratings companies such as S&P and Moody’s Corp for triggering the financial crisis when they cut the inflated ratings they had applied to complex mortgage-backed securities. “Moody’s, the
Commission’s case study in this area, relied on lawed and outdated models to issue erroneous ratings on mortgage-related securities, failed to perform meaningful due diligence on the assets underlying the securities, and continued to rely on those models even after it became obvious that the models were wrong (FCIR 2011:126).” The Commission investigated institutions included American International Group (AIG), Bear Stearns, Citigroup, Countrywide Financial, Fannie Mae, Goldman Sachs, Lehman Brothers, Merrill Lynch, Moody’s, and Wachovia. “26 million Americans who are out of work, cannot ind full-time work, or have given up looking for work. About four million families have lost their homes to foreclosure and another four and a half million have slipped into the foreclosure process or are seriously behind on their mortgage payments. Nearly 11 trillion in household wealth has vanished, with retirement accounts and life savings swept away.” “The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand, and manage evolving risks within a system essential to the well-being of the American public (The Financial Crisis Inquiry Report 2011-01:xvii).”

2009-05 The National Commission on the Causes of the Financial and Economic Crisis in the United States was established as part of the Fraud Enforcement and Recovery Act (Public Law 111-21.) passed by Congress and signed by the President. This independent, 10-member panel was composed of private citizens with experience in areas such as housing, economics, inance, market regulation, banking, and consumer protection. Six members of the Commission were appointed by the Democratic leadership of Congress and four members by the Republican leadership.

2008-09/10 Fed Chairman Ben Bernanke told the FCIC, “As a scholar of the Great Depression, I honestly believe that September and October of 2008 was the worst financial crisis in global history, including the Great Depression. If you look at the firms that came under pressure in that period . . . only one . . . was not at serious risk of failure. . . . So out of maybe the 13, 13 of the most important financial institutions in the United States, 12 were at risk of failure within a period of a week or two (The Financial Crisis Inquiry Report 2011-01:354).”

2008-09 An extra digit was added to the US federal debt clock when the debt exceeded $10 trillion (Durst). The deficit problem intensified since the 2008 financial crisis.

2003-2007 Between “2003 and 2007, as house prices rose 27% nationally and $4 trillion in mortgage-backed securities were created, Wall Street issued nearly $799 billion in CDOs that included mortgage-backed securities as collateral. Collateralized debt obligations (CDOs), structured financial instruments that purchase and pool financial assets such as the riskier tranches of various mortgage-backed securities, came into existence in the first decade of this century [...] The key players involved in the creation, management and sales of CDOs were Securities firms, CDO managers, rating agencies, investors, and financial guarantors who took risks but made huge profits [...] CDO managers and investors are derivative folks not mortgage professionals or real estate professionals (The Financial Crisis Inquiry Report 2011-01:128).

2007 From 1978 to 2007, “the amount of debt held by the inancial sector soared from $3 trillion to $36 trillion, more than doubling as a share of gross domestic product. The very nature of many Wall Street irms changed—from relatively staid private partnerships to publicly traded corporations taking greater and more diverse kinds of risks (The Financial Crisis Inquiry Report 2011-01).” “Money washed through the economy like water rushing through a broken dam. Low interest rates and then foreign capital helped fuel the boom. Construction workers, landscape architects, real estate agents, loan brokers, and appraisers proited on Main Street, while investment bankers and traders on Wall Street moved even higher on the American earnings pyramid and the share prices of the most aggressive inancial service irms reached all-time highs. Homeowners pulled cash out of their homes to send their kids to college, pay medical bills, install designer kitchens with granite counters, take vacations, or launch new businesses. They also paid off credit
cards, even as personal debt rose nationally. Survey evidence shows that about 5% of homeowners pulled out cash to buy a vehicle and over 40% spent the cash on a catchall category including tax payments, clothing, gifts, and living expenses. Renters used new forms of loans to buy homes and to move to suburban subdivisions, erecting swing sets in their backyards and enrolling their children in local schools (The Financial Crisis Inquiry Report 2011-01:5).” . Overall mortgage indebtedness in the United States climbed from $5.3 trillion in 2001 to $10.5 trillion in 2007. The mortgage debt of American households rose almost as much in the six years from 2001 to 2007 as it had over the course of the country’s more than -year history. The amount of mortgage debt per household rose from $91,500 in 2001 to $149,500 in 2007 (The Financial Crisis Inquiry Report 2011-01:6).”

2006 Home sales volume started to increase, and average home prices nationwide climbed, rising 67% in eight years by one measure and hitting a national high of $227,100 in early 2006. (The Financial Crisis Inquiry Report 2011-01:5).”

2006 On the eve of the crisis in 2006, financial sector proits constituted 27% of all corporate proits in the United States, up from 15% in 1980 (The Financial Crisis Inquiry Report 2011-01: xvii).”

2005 Paul McCulley, a managing director at PIMCO, one of the nation’s largest money management firms, told the Commission that he and his colleagues began to get worried about “serious signs of bubbles”. They therefore sent out credit analysts to 20 cities to do what he called “old-fashioned shoe-leather research,” talking to real estate brokers, mortgage brokers, and local investors about the housing and mortgage markets. They witnessed what he called “the outright degradation of underwriting standards,” McCulley asserted, and they shared what they had learned when they got back home to the company’s Newport Beach, California, headquarters. “And when our group came back, they reported what they saw, and we adjusted our risk accordingly,” McCulley told the Commission. The company “severely limited” its participation in risky mortgage securities (The Financial Crisis Inquiry Report 2011-01: 4).”

2005 Convinced that we lived in a less risky world former Federal Reserve governor and National Economic Council director under President George W. Bush Lawrence Lindsey encouraged any rational investor to respond to a less risky world by laying on more risk. The US played with an asymmetric policy that allowed for unfettered, unregulated markets and mortgages and unrestrained growth. If there was a glitch the Treasurer cushioned the impact. (The Financial Crisis Inquiry Report 2011-01: 133).” suggested this could be a “moral hazard.”: “Did the policy encourage investors and financial institutions to gamble because their upside was unlimited while the full power and inluence of the Fed protected their downside (at least against catastrophic losses)? Greenspan himself warned about this in a 2005 speech, noting that higher asset prices were “in part the indirect result of investors accepting lower compensation for risk” and cautioning that “newly abundant liquidity can readily disappear.” Yet the only real action would be an upward march of the federal funds rate that had begun in the summer of 2004, although, as he pointed out in the same 2005 speech, this had little effect. And the markets were undeterred (The Financial Crisis Inquiry Report 2011-01: 133).”

2004 Synthetic CDOs, such as Goldman Sachs’s Abacus 2004-1 deal, were complex paper transactions involving credit default swaps (The Financial Crisis Inquiry Report 2011-01:144).”

2004 A new debt clock was installed at West 44th Street and Avenue of the Americas (Durst).

2000-2003 The Federal Reserve cut interest rates early in the new century and mortgage rates fell, home refinancing surged, climbing from $460 billion in 2000 to $2.8 trillion in 2003, allowing people to withdraw equity built up over previous decades and to consume more, despite stagnant wages (The Financial Crisis Inquiry Report 2011-01: 4).”

2002The debt clock was switched back on (Durst).

2000 During the 1990s the US prospered, the US national debt slowly decreased. The debt clock was temporarily switched off in 2000 (Durst).

1989-02-20 The US national debt was c. $3 trillion. Seymour Durst conceived and installed the first National Debt Clock to call attention to the soaring debt and each family’s share of it. The original Durst clock was installed on Sixth Avenue and 42nd Street(Durst).

1980s Federal Reserve chairman Alan Greenspan championed deregulation and reliance on self-regulation by financial institutions. Deregulation was argued by Greenspan to raise the level of competitiveness, increase productivity and efficiency and therefore lower prices. For 30 years until the crash in 2007, deregulation was supported by successive administrations and Congresses, and actively pushed by the powerful inancial industry at every turn, had stripped away key safeguards, which could have helped avoid catastrophe. This approach had opened up gaps in oversight of critical areas with trillions of dollars at risk, such as the shadow banking system and over-the-counter derivatives markets. In addition, the government permitted inancial irms to pick their preferred regulators in what became a race to the weakest supervisor (The Financial Crisis Inquiry Report 2011-01: xvii).” “Between 1978 and 1980, Congress and President Carter approved deregulation of airlines, trucking, and railroads. Carter aide Mary Schuman played a crucial role in bringing about airline deregulation. For all the market talk that surrounded transportation politics before and after 1980, however, officials of the American state had been and remained the principal agents creating those markets (Rose et al. 2006.)”

1971 The first comprehensive proposal to deregulate a major industry in the United States, transportation, originated in the Richard Nixon Administration and was forwarded to Congress.

1970s Deregulation gained momentum, influenced by research at the University of Chicago and the theories of Ludwig von Mises, Friedrich von Hayek, and Milton Friedman, among others. Presidents Nixon, Ford, and Carter sought to deregulate transportation with a view toward reversing “stagflation.” (Rose et al. 2006.)

1960s President Johnson sought broad deregulation of rail, truck, and airline firms. Johnson wanted another device to “fine tune” the economy. (Rose, Mark H. Bruce E. Seely, and Paul F. Barrett. 2006. Railroads, Trucks, Airlines, and American Public Policy in the Twentieth Century.)

1917 The US Congress enacted a debt ceiling.

Webliography and Bibligraphy

Angelides, Phil; et al. 2011-01. The Financial Crisis Inquiry Report” Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States. Official Government Edition. The Financial Crisis Inquiry Commission. Pursuant to Public Law 111-21.

Rose, Mark H. Bruce E. Seely, and Paul F. Barrett. 2006. Railroads, Trucks, Airlines, and American Public Policy in the Twentieth Century.


There is a high degree of uncertainty in predicting future commodity prices that baffles those engaged in monetary policies, academics, economists, and the everyday consumer.

High frequency trading (see Direct Edge 2005-) using proprietary algorithmic trading programs accounted for over 25% of all shares traded by the buy side by 2009. In 2009 73% of US equity trading volume was attributed to the activities of a small number of high-frequency trading firms, including divisions of Goldman Sachs and UBS but many more obscure, startup firms (with only 12-100 employees) such as Archelon, EWT Trading, Getco and Peak6 (Heires, Katherine. 2009-07-20Code Green: Goldman Sachs & UBS Cases Heighten Need to Keep Valuable Digital Assets From Walking Out The Door. Millions in Trading Profits May Depend On It Securities Industry News). The entire event/analysis/action cycle has been reduced for traders with the fastest machines to a few milliseconds. Fast computing not rational decision-making counts. Arnuk and Saluzzi (2009) call these activities toxic trade and claim that the high frequency trader seize the best deals at the expense of real investors whose machines are not as fast.

NYSE specialists no longer provide price stability. With the advent NYSE Hybrid, specialist market share has dropped from 80% to 25%.

There is a saturation of equity quotes with the entire event/analysis/action cycle has been reduced for some traders to a few milliseconds.

CQS Capacity (Quotes per Second) capacity was increased was increased by 33% to 1 million quotes/second on July 4, 2010 and on July 5th there was a micro-burst of activity. July 5th was 33% more active than any trading day in history.] CQS is already planning to increase capacity an additional 25% in October 2011. How long before that limit is hit ? We think it will be hit the very next trading day. If 3 years ago someone told us that equity quote traffic rates for NYSE, AMEX and ARCA issues would exceed 1 Million/second (not even counting Nasdaq stocks), we would have thought the market would have entered the greatest bull or bear market ever known. Instead, you can’t even recognize from a 1 minute chart where these bursts of out-of-control quote traffic rates occur. And when they do occur, a significant percentage of those quotes will have already expired before they even leave the exchange network. At these rates of growth, we will no longer have a diversity of trading participants with accurate market data, and regulators will have no hope of ever piecing together what happened after the next disaster. It took the SEC five months just to assemble equity data to analyse the flash crash [of May 6, 2010]. When the next disaster strikes, they will have to contend with 5 to 10 times more data (“Equity Quote Saturation” Nanex).”

“The market itself creates events in the form of imbalances of supply and demand that could be of value to traders who are fast enough to respond to them. There is no doubt that being faster than others entails private advantage, but is it socially beneficial? The first mover in the case of fundamental news imposes costs on other traders, and high adverse selection costs could cause market failure. The fast traders that take advantage of market events could provide valuable liquidity to those seeking immediacy and hence enhance market quality, but could also step ahead of large orders in the book, thereby imposing costs on other liquidity providers (as described in the specialist context by Seppi (1997)) (Hasbrouck, Joel; Saar, Gideon. “Low-Latency Trading“. p. 1. Retrieved 18 July 2011).”

Canadian-born, Harvard-educated economist Dean of the University of Toronto’s Rotman School of Management, Roger L. Martin argued in his publication entitled Fixing the Game: How Runaway Expectations Broke the Economy, and How to Get Back to Reality (2011-05) “The mayhem in our capital markets is ultimately the unfortunate effect of tightly tying together two different markets: the real market and the expectations market.” In her article printed in The Atlantic Lane Wallace (2009-07-07) admired Martin’s use of an easy-to-understand football analogy to explain how flawed economic theories about compensation and investment contributed to the 2008 melt-down on Wall Street. I have been unable to find the original Financial Times article to which Wallace referred but Martin has used the example of the New England Patriots’ stellar 16-0 record in their 2007 winning streak in Fixing the Game (2011) and this section is posted on Huffington Post. In it Martin explained how MVP Quarterback Tom Brady, the head coach and the team’s superlative 2007 performance was perfect even in measurable “real” terms. He uses Brady’s real performance value as an analogy for real stock market values and real embodied customers. He contrasts this with the speculators’ expectations market based on the point spread. The Patriots’ performance for example was only mediocre because the Patriots covered the point spread only ten times. Martin explained that “In betting vernacular, a favored team covers the spread when it wins the game by more than the point spread. In this case, the point spread is the moral equivalent of the stock price, in that it captures the consensus expectations of all bettors (Huffington Post).” Martin argued that it is impossible to meet bettors’ expectations forever and expectations grow to unattainable levels in both football and the stock market. In “American capitalism, CEOs are compensated directly and explicitly on how they perform against the point spread; that is, against expectations (Martin 2011 cited in Huffington Post).” And CEOs increasingly focus on managing share price over the short run something that is easier to manipulate. Shareholders are better off however when the focus of their investment managers is on the long term, on increasing share price more or less forever. In this horse-race spread-covering betting scenario, the interests of shareholders and executives are not aligned.

In 2009 (Stiglitz Commission 2009).” warned that financial speculation exacerbated the mortgage meltdown, the phenomenal increase in the price of energy including oil. As the price of energy increases countries’ purchasing power decreased. “The transfer of income from those who suffered from these price increases to those who benefited weakened global aggregate demand and contributed to the global imbalances which played an important role in the crisis (Stiglitz Commission 2009).”

There are those who claim that perceptions not realities create oil prices (Dicker 2011:309). He argued that the illogical outcome of BP disaster (the decrease in the price of oil when the supply was less than demand) is another example of the way in which oil markets and prices are influenced by quick analysis of traders and investors looking to benefit from a well-placed bet not by legitimate changes in fundamental supply.

While gurus such as Bernstein (2000) argue that gambling is for anyone but speculation is for professionals, the chaos and unpredictability of the current global economy have been linked to a growing culture of gambling in futures trading rather than level-headed professionalism. Gamblers create risk simply by placing a bet; professional speculators “transfer risk from the hedgers to the speculators” and it therefore called risk management instead of gambling.

“It rained last night so the price of soy beans will be down today.” Although the basis of fundamental analysis in economics is supply and demand, the actual fundamental analysis of specific markets that might generate accurate price predictions are complicated as numbers of factors overlap and massive quantities of data need to be considered. The simple equation involves how much of a commodity or service are buyers willing to pay at a given time and place. There used to be a correlation between price and consumption. Factors that impact on price of commodities include the state of the economy (local, regional, national and international – inflationary, recessionary with rising or falling employment), availability of alternate products or services, storage possibilities, weather, seasonality, price cycles, price trends, government subsidies, political influences, protectionist attitudes, international tensions, fear of war, hoarding, stockpiling, demand for raw materials (sugar, petroleum, copper, platinum, coffee, cocoa), currency fluctuations, health of the economy, level of unemployment, housing starts. Most technical systems are not effective in making traders money.

In examining implications regarding monetary policies the US Federal Reserve Board theoretical analyses often focus on: “commodity prices and inflation, the role of labor costs in the price-setting process, issues arising from the necessity of making policy in real time, and the determinants and effects of changes in inflation expectations (Bernanke 2008-06-09).”

While some argue that “policymakers care only about expected economic outcomes and not the uncertainty surrounding those outcomes” Pesenti and Groen claim that policymakers are concerned about the risks to their projections as well as the projections themselves (Pesenti and Groen 2011-03)?” Should and how does this affect the way in which policies are made?

Selected Timeline of Critical Events

2011-08-09. “In recent days, the high-frequency operation at Tradeworx Inc., a Red Bank, N.J. firm, juggled its largest daily volumes since its 2009 launch, resulting in some of its most profitable days on record, according to its founder, Manoj Narang. The reason: High-speed firms’ profits are highly correlated with increased volatility in the market. The more stock are rising and falling, the better they are able to make profits on the difference between buy and sell prices. A gauge of volatility, the Chicago Board Options Exchange Volatility Index, or VIX, rose more than 100% from Aug. 1 to Aug. 8. (Patterson, Scott. 2011-08-09. “High Frequency Traders Win in Market Bloodbath.” Wall Street Journal Blog Marketbeat.)”

2011-08-13 ANDREW ROSS SORKIN: “[T] he issue of what’s called high-frequency trading and electronic trading that she just mentioned is absolutely right. The reason why you’re seeing these huge gains and huge losses is because there are people who are making these decisions based on the headlines, but then there are computers, there’s machines that are effectively taking over and exacerbating the ups and the downs, because what they’re looking to do is — these are machines with algorithms that are looking to pick up pennies, lots of pennies in many instances. But they’re looking for one stock to go up and one stock to go down, and they see different correlations. And that’s really exacerbating the big moves in volatility we’re seeing in the stock market these days.” CATHERINE MANN: [The] ordinary investor, the person on Main Street is affected by these gyrations. [The ordinary investor] feels a disconnect between the big profits that some Wall Street, the big financials or non-financials companies get by trading on this high frequency and the ups and the downs, and the average person on Main Street. “The disconnect there has been there for a while. It’s been worsened because of the lack of credit being extended to Main Street, as — as — even though the banks have gotten better, in better shape, they have not extended any credit to Main Street. And so that disconnect is worse. And they really feel like Wall Street is out to get them. And they’re probably right about that (“Uncertainty, Computerized Trading Fuel Wall Street’s Wild Ride.”)

2011-07-07 Melloy, John. 2011-07-07. “New Way High-Speed Traders Get Edge on Investors.” Fast Money. CNBC.com

2011 High-frequency trading firms using high-frequency techniques (software-based mechanisms: high frequency algorithmic trading) earned $12.9 billion in profit in the last two years (2009-2011), according to TABB Group, a specialist on the markets.

2011-07-18 The price of gold climbed to c.”$1604 an ounce, putting the precious metal on track for a 10th-straight rise and another record settlement. The U.S. dollar strengthened against the euro but declined versus the yen. Crude-oil prices fell below $95 a barrel (Wall Street Journal).”

2011-07-10 Anderlini, Jamil. “Trade data show China economy slowing.” “In a sign that industrial activity in the country was moderating, imports of key commodities like crude oil, aluminium and iron ore all fell in June from a month earlier. Crude oil imports fell to the lowest level in eight months and were down 11.5 per cent from the same month a year earlier and, while copper imports rebounded in June, they were significantly down on 12 months ago.”

2011-07-08 U.S. stocks slumped. Crude-oil futures fell 2.9% and traded just below $96 a barrel (Wall Street Journal).

2011-07-04Speculators unburned.” The Economist. Oil traders are free to bid for it. And it seems they did. The Department for Energy says its auction was heavily oversubscribed with bids from more than 90 parties. For reference, there are 148 refineries in America, but most are owned by a few major players such as Exxon, who would do the actual bidding. Traders who anticipate the oil price will rise, and have the capacity to store oil, can buy physical stocks now, and sell oil forward. As long as the price rises enough to cover storage costs, they will turn a profit. If a trader was able to purchase West Texas Intermediate—the oil held in America’s Strategic Petroleum Reserve (SPR)—at the spot price on June 24th, they would already be sitting on a tidy profit.

2011-07-04 Capacity (Quotes per Second) CQS capacity was increased by 33% to 1 million quotes/second. On July 5th, 2011 there was a micro-burst of activity: 33% more active than any trading day in history (Nanex Research).

2011-06-27 “The London Stock Exchange (LSE.L) has launched a super-fast trading service in its latest bid to court more business from high-frequency trading (HFT) firms.” (Jeff, Luke. 2011-06-27. “LSE makes latest high-frequency move.” London:Reuters.

2011-06 “A recent report produced by a joint advisory committee of the SEC and the Commodity Futures Trading Commission urged the SEC to work with the Financial Industry Regulatory Authority and the exchanges “to develop effective testing of sponsoring broker-dealer risk management controls and supervisory procedures.The concern from Washington prompted a group of 12 brokerages to collaborate on a set of risk guidelines intended for adoption across the industry. Working under the aegis of FIX Protocol Limited, the group recently published a checklist of 13 risk controls it hopes will deter the acceptance of orders that might disrupt the marketplace. FIX Protocol is a pan-industry group that promotes and supports electronic trading through the ubiquitous FIX communications standard. The guidelines devised by the members of the FPL Risk Management Working Group focus strictly on algorithmic and direct-market-access orders for cash equities. The members include the nine largest trading firms, which account for the vast majority of industry orders (“New Checks Unlikely to Satisfy SEC.” Traders Magazine).”

2011-06-29

2011-06-28 “Futures advanced a second day as Brent crude oil climbed. Gasoline and heating oil rose as crude and equities gained and the dollar weakened against the euro.”(Powell 2011-06-28).

2011-06-23 In its commitment to keep oil markets well-supplied the Paris-based International Energy Agency (IEA) announced that the 28 IEA member countries for the third time in the IEA history, they would release 60 million barrels of oil (2 million barrels of oil per day from their emergency stocks over an initial period c. June-July 15) to offset the ongoing disruption of oil supplies from Libya. By May 30 132 mb of Libyan light, sweet crude oil was not available to the market and analysts expect this to continue through 2011. This supply disruption has been underway for some time and its effect has become more pronounced as it has continued. The normal seasonal increase in refiner demand expected for this summer will exacerbate the shortfall further. Greater tightness in the oil market threatens to undermine the fragile global economic recovery (International Energy Agency 2011-06-23).

2011-06-16 Fletcher, Sam. “Energy prices tumble; Brent-WTI spread at 3-month low.” PennEnergy- Energy News. West Texas Intermediate to “the weakest level” since March, said Olivier Jakob at Petromatrix, Zug, Switzerland. In Houston, analysts at Raymond James & Associates Inc. said the European debt crisis and continued worries of a weakening US economy …

2011-06-15 Britain’s top banks will have to protect their retail business from investment banking activities (casino banking) after “the government backed a plan to overhaul the industry and shield taxpayers from future losses (more).” See Financial Times also.

2011 Debates in the UK on how to make our financial institutions safer include ring-fencing utility operations from casino banking, new capital requirements and living wills. Megabanks (Barclays, Lloyds, RBS and Santander) were rescued by taxpayers as well as through worsening savings and loan rates. Read more: http://www.thisismoney.co.uk/money/article-2004841/SUNDERLAND-ON-SATURDAY-Banks-need-customers-queue.html#ixzz1QbQ38DAGSee Sunderland “The scale of the taxpayer bailout of the banking system has led to lengthening dole queues and severe cuts to public spending (more).”

2011 Megabank Barclays was ordered by the Financial Services Authority to pay a fine of £7m and to repay up to £60m to mainly elderly customers who had been duped into gambling their savings on the stock market. Read more

2011-06-17 In the Alberta oil sands, oil prices tripled from their 2009 lows. Drilling activity was on the upswing. Unemployment was falling and oilsands investment was surging (Read more)

“When you see oil prices spiking by $2, $3 or $5 a day, that’s not a situation Alberta wants to be in because it’s not driven by (market) fundamentals, it’s being driven by speculators”.

2011-05-02 through 2011-05-07 The price of silver dropped 25% in just four trading days.

2011-04 Investors pushed the price of silver up 57% in 2011 before a massive correction started on May 2, 2011.

2011-03 In the wake of the U.S. real estate collapse, declining returns in the bond market, worries about a global slowdown and fears that after a nice run, equities have nowhere to go but down, big hedge funds and other sophisticated market pros have been loading up on cotton, corn, soybean oil and other soft commodities. Milner, Brian.

2011-03. “Soaring commodity prices at mercy of demand – from speculators.” Globe and Mail.

2011-03 A rally in commodity prices resurrected inflationary threats (Pesenti and Groen 2011-03).

2011-01-12 American International Group, which received a massive bailout in 2008, claimed it expected to complete a recapitalization that would allow it to fully pay back the government (more).

2011-02 Coffee prices: In New York, the benchmark May futures contract hit $2.784 a pound, their highest level since $3.40 in 1977, an all-time record. During the past 12 months alone, those prices rose by 145%. Last week the International Coffee Organisation said the price had hit a 14-year high. By July 2011 “Coffee futures are up 53% over the past year, although the front-month contract for July delivery fell 1.9%, or 4.8 cents, in Friday to close at $2.5255 a pound.”

2011-06-01 Investors should prepare for renewed swings in prices of commodities (oil, natural gas, orange juice) “swings expected after weather forecasters predicted a busy Atlantic hurricane season.” Blais 2011-06-01 .” Financial Times. London.

2010-12 From 1977-2010 the compound annual sharehold value continues to decrease compared to pre-shareholder-value era (1933-1977) (Martin 2011 cited in Huffington Post).” Companies tend to boost earnings per share without creating value but gross-margin return on inventory investment drives longer term value creation. CEOs need to be held accountable for long-term performance by linking compensation to such metrics as multiyear stock performance. see Lek.

2010-09 Investment banker multimillionaire 59-year-old American Bob Diamond was appointed as head of Barclays megabank raising concerns that the Treasury should separate traditional retail banking from casino banking. Casino banking can lead to potential massive profits or loss depending on the level of risk of investments. Vince Cable: “Diamond, with his £20m bonuses, is the unacceptable face of this bonus-driven banking,” Oakeshott said. “This highlights the need to break-up and de-risk the British banking system.” Barclays appointment highlights ‘casino’ banking fears Business secretary says Barclays’ appointment of Bob Diamond illustrates dangers of having retail banks with massively profitable investment arms attached to them.

2010—08-16 The CFTC sanctioned ConAgra Trade Group, Inc. (CTG) $12 Million for causing a non-bona fide price to be reported in the NYMEX Crude Oil futures contract. On January 2, 2008, CTG was the first to purchase NYMEX crude oil futures contracts at the then-historic price of $100. As a result of CTG’s effort to be the first to trade at the $100 level, CTG caused a non-bona fide price to be reported, according to the CFTC order. (CFTC Press Release 5873-10, August 16, 2010) (more).

2010-07-21 President Obama signed the Dodd-Frank financial regulatory bill. “Title VII of the Dodd-Frank Act amends the Commodity Exchange Act to establish a comprehensive new regulatory framework for swaps and security-based swaps. The legislation is enacted to reduce risk, increase transparency, and promote market integrity within the financial system by, among other things: 1) providing for the registration and comprehensive regulation of swap dealers and major swap participants; 2) imposing clearing and trade execution requirements on standardized derivative products; 3) creating robust recordkeeping and real-time reporting regimes; and 4) enhancing the Commission’s rulemaking and enforcement authorities with respect to, among others, all registered entities and intermediaries subject to the Commission’s oversight. On the same day, the CFTC releases a list of 30 areas of rulemaking to implement the Dodd-Frank Act. (CFTC Press Releases 5855-10 and 5856-10, July 21, 2010) (more). The Dodd-Frank Act included the Volcker Rule which requires that “regulators implement regulations for banks, their affiliates and holding companies, to prohibit proprietary trading, investment in and sponsorship of hedge funds and private equity funds, and to limit relationships with hedge funds and private equity funds. Non-bank financial institutions supervised by the Fed also have restrictions on proprietary trading and hedge fund and private equity investments. The Council will study and make recommendations on implementation to aid regulators (more).”

2010-05-24 A YouTube video of High Frequency Trading explained by William Arnuk, the 13-year-old son of Sal Arnuk, who works for the HFT research firm, Themis Trading.

2010-05 With the flow from BP’s Deepwater Horizon huge oil spill unstaunched both stock and oil markets crashed with the brunt of the losses in the energy sector. Oil prices fell. (Dicker 2011:305).

2010—05-06 Major stock indexes and stock index futures experience a “flash crash”, a brief but severe drop in prices, falling more than 5% in a matter of minutes, only to recover a short time later. Dow Jones industrials fell roughly 900 points, only to quickly recover. Some individual securities experience more volatility than the stock indexes. (Statement by SEC and CFTC, May 6, 2010). (more) The joint CFTC/SEC report on the “flash crash” of May 6, 2010, examined the role of high-frequency trading in this extreme episode (U. S. Commodity Futures Trading Commission and the U.S. Securities and Exchange Commission, 2010). Whether or not a single large order caused the “flash crash” in May 2010, as the Securities and Exchange Commission has alleged that a single large order may have caused the crash and has placed pressure on brokers to make sure they don’t toss any oversize or out-of-control orders into the market (Traders Magazine). “The regulators’ official October report on the 15-minute plummet in the Dow Jones Industrial Average on May 6, 2010, blamed a liquidity crisis that followed a bad trade in S&P 500 futures. Officials have since taken action to prevent a similar catastrophe by instituting circuit breakers that halt individual stocks in the S&P 500 after a 10 percent move (Melloy 2011-07-07).”

2010—04-06 It took $20 trillion of public funds over a period of two-and-a-half years to lift the total world market capitalization of listed companies by $16.4 trillion. This means some $3.6 trillion, or 17.5%, had been burned up by transmission friction. Government intervention failed to produce a dollar-for-dollar break-even impact on battered markets, let alone generate any multiplier effect, which in normal times could be expected to be between nine and 11 times. In the meantime, with the exception of China’s, the real global economy continues to slide downward, with rising unemployment and underemployment. The massive government injection of new money managed to stabilize world equity markets by January 2010, but only at 73.5% of its peak value in October 2007. It still left the credit markets around the world dangerously anemic and the real economy operating on intensive care and life support measures from government. This is because the bailout and stimulus money failed to land on the demand side of the economy, which has been plagued by overcapacity fueled by inadequate workers’ income, masked by excessive debt, and by a drastic reversal of the wealtheffect on consumer demand from the bursting of the debt bubble. The bursting of the debt bubble destroyed the wealth it buoyed, but it left the debt that fueled the bubble standing as liability in the economy. Much of the new government money came from adding to the national debt, which taxpayers will have to pay back in future years. This money went to bail out distressed banks and financialinstitutions, which used it to profit from global “carry trade” speculation, as hot money that exploited interest rate arbitrage trades between economies. The toxic debts have remained in the global economy at face value, having only been transformed from private debts to public debts to prevent total collapse of the private sector. The debt bubble has been turned into a dense debt black hole of intense financial gravity the traps all light from appearing at the end of the recovery tunnel.(Lui, Henry C.K. 2010—04-06. “Bailouts, Stimulus Packages and Jobless Recovery: The Crisis of Wealth Destruction. Part I).”

2010-04-20 BP’s Deepwater Horizon rig caught fire resulted in oil spill.

2010-03 Michael Lewis published his book entitled The Big Short in which he returned “to his financial roots to excavate the crisis of 2007–2008, employing his trademark technique of casting a microcosmic lens on the personal histories of several Wall Street outsiders who were betting against the grain—to shed light on the macrocosmic tale of greed and fear.” “Lewis is a capable guide into the world of CDOs, subprime mortgages, head-in-the-sand investments, inflated egos–and the big short.” Lewis provides “a savvy assessment of the wisdom of the financial bailout and where-are-they-now updates on the book’s various heroes and villains.” (more)

2010—01-14 The “CFTC votes at an open meeting to publish in the Federal Register a proposal to set position limits for futures and option contracts in the major energy markets. (CFTC Press Release 5771-10, January 7, 2010) (more).”

2010-01 Organizations “representing the electric and natural gas industries and serving nearly all energy customers in the United States, support the goals of the Administration and Congress to improve transparency and reduce systemic risk in over-the-counter (OTC) derivatives markets. As the Senate considers financial reform legislation, [they argued] that it preserve the ability of companies to access critical OTC energy derivatives products and markets. engaged in off-market trading for oil which is unregulated. Estimates for the OTC derivative market for all assets range upward of $600 trillion. See (Edison Electric Institute (EEI). 2010-01. “OTC Derivatives Reform: Energy Sector Impacts.”).

2009-12-17 “Automated market makers (AMM) co-locate their servers in the NASDAQ or the NYSE building, right next to the exchanges’ servers. AMMs already have faster servers than most institutional and retail investors. But because they are co-located, their servers
can react even faster.” “According to Traders Magazine the number of firms that co-locate at NASDAQ has doubled over the last year (Arnuk, Sal L.; Saluzzi, Joseph. 2009-12-17. “Toxic Equity Trading Order Flow on Wall Street: The Real Force Behind the Explosion in Volume and Volatility.” A Themis Trading LLC White Paper.)

2009-10-08High Frequency Trading Technology: a TABB Anthology.” TABB reported that software capable of electronic routing and execution based on algorithms account for more than 25% of all shares traded by the buy side today. A relatively few high frequency proprietary trading firms experienced a meteoric rise and now wield far greater influence on the markets today than most people recognize.

2009-10-30 Market analysts argued that oil markets were no longer tied to supply and demand fundamentals. They were concerned with the extremely high correlation between crude oil prices and US currency (“Flood 2009-10-30).

2009-08-06 Computer-based algorithmic programs carry out transactions in 400 microseconds which is 1000 times faster than the human eye. Few ordinary investors are aware of or have access to this frenetic, technology-driven world of high-frequency trading which accounted for 50% of daily volume in US stocks, up from estimates of 30 per cent in 2005 (Mackenzie, Michael; Grant, Jeremy. 2009-08-06. “The dash to flash.” Financial Times.)

2009-07-20. Goldman Sachs and UBS filed charges against former employees they allege stole proprietary computer code key to their high-speed trading programs, now the most tactical and strategic weapons on Wall Street (Heires, Katherine. 2009-07-20Code Green: Goldman Sachs & UBS Cases Heighten Need to Keep Valuable Digital Assets From Walking Out The Door. Millions in Trading Profits May Depend On It Securities Industry News).”

2009-03 UBS filed papers “charging three ex-employees with “misappropriation of trade secrets,” specifically the misappropriation of 25,000 lines of source code for the firm’s high-speed, algorithmic trading programs (Heires, Katherine. 2009-07-20Code Green: Goldman Sachs & UBS Cases Heighten Need to Keep Valuable Digital Assets From Walking Out The Door. Millions in Trading Profits May Depend On It Securities Industry News).”

2009-07-03. Goldman Sachs brought charges “against a former vice president for equity strategy and computer programmer on July 3 for allegedly copying 32 megabytes of the bank’s trading codes and uploading them to an encrypted server before sending them to a home computer and other
devices (Heires, Katherine. 2009-07-20Code Green: Goldman Sachs & UBS Cases Heighten Need to Keep Valuable Digital Assets From Walking Out The Door. Millions in Trading Profits May Depend On It Securities Industry News).”

2009-06 Signs of an approaching global economic recovery re-emerged (Pesenti and Groen 2011-03).

2009-06-28 Evans-Pritchard, Ambrose. “China’s banks are an accident waiting to happen to every one of us.
Fitch Ratings warned that China’s banks have lent up to $1,000bn (£600bn) since December 2008. “Money is leaking instead into Shanghai’s stock casino, or being used to keep bankrupt builders on life support.” This does not help the world economy.

2009-06-26 “The Iraq War and other events which helped set off an increase in the price of oil had a further depressing effect on countries which import energy, including the U.S. The magnitude of the increase in energy prices was exacerbated by financial speculation. This change in the price of energy, accompanied by governments’ attempts to develop alternative bio energy sources contributed to higher food prices. The sharp increase in energy prices thus directly and indirectly brought further reductions in purchasing power within many countries. The transfer of income from those who suffered from these price increases to those who benefited weakened global aggregate demand and contributed to the global imbalances which played an important role in the crisis (Stiglitz Commission 2009).”

2009-05 During “an annual conference of the Securities Industry and Financial Markets Association, top executives from Direct Edge and the NYSE angrily debated the merits of flash orders. Flash orders are a type of high frequency trading. Institutional paying participants get a flash peek at prices before they are released to the broader, public market (more).”

2009-03-24 The Federal Reserve, working closely with the Treasury, made the decision to lend to AIG on September 16, 2008. It was an extraordinary time. Global financial markets were experiencing unprecedented strains and a worldwide loss of confidence. Fannie Mae and Freddie Mac had been placed into conservatorship only two weeks earlier, and Lehman Brothers had filed for bankruptcy the day before. We were very concerned about a number of other major firms that were under intense stress. AIG’s financial condition had been deteriorating for some time, caused by actual and expected losses on subprime mortgage-backed securities and on credit default swaps that AIG’s Financial Products unit, AIG-FP, had written on mortgage-related securities. As confidence in the firm declined, and with efforts to find a private-sector solution unsuccessful, AIG faced severe liquidity pressures that threatened to force it imminently into bankruptcy (more). Claims of bondholders and counterparties were paid at 100 cents on the dollar by taxpayers, without giving taxpayers the rights to the future profits of these institutions. Benefits went to the banks while the taxpayers suffered the costs (more).

2009-02-03 The “U.S. government announced a restructuring of a bailout plan for the troubled insurer American International Group Inc. Monday, extending $30 billion in additional aid to the company. News of the additional funds came as AIG, once the world’s largest insurer, said it lost $61.7 billion in the fourth quarter, the biggest quarterly loss in U.S. corporate history, amid continued financial market turmoil.”

2008-10-18 The President of the United Nations General Assembly, “Miguel D’Escoto Brockmann, announced his intention to establish a taskforce of experts to review the workings of the global financial system, including major bodies such as the World Bank and the IMF, and to suggest steps to be taken by Member States to secure a more sustainable and just global economic order (http://www.un.org).” Noted economist and Kerala State Planning Board Vice-Chairman Prabhat Patnaik was included in a four-member high-power task force of the United Nations (U.N.) to recommend reforms of the global financial system. The task force Commission of Experts on Reforms of the International Monetary and Financial System (2009), informally known as the Stiglitz Commission, was headed by Nobel Prize-winning economist Joseph Stiglitz.

2008 Morgan Stanley and Goldman Sachs, the last two investment banks left standing, announced they would become traditional bank holding companies, marking the end of an era for Wall Street (more).

2008-09-16 American International Group, Inc. (AIG) (NYSE: AIG), an American insurance corporation, suffered a liquidity crisis following the downgrade of its credit rating. “The Federal Reserve, working closely with the Treasury, made the decision to lend to AIG on September 16, 2008. It was an extraordinary time. Global financial markets were experiencing unprecedented strains and a worldwide loss of confidence. Fannie Mae and Freddie Mac had been placed into conservatorship only two weeks earlier, and Lehman Brothers had filed for bankruptcy the day before. We were very concerned about a number of other major firms that were under intense stress. AIG’s financial condition had been deteriorating for some time, caused by actual and expected losses on subprime mortgage-backed securities and on credit default swaps that AIG’s Financial Products unit, AIG-FP, had written on mortgage-related securities. As confidence in the firm declined, and with efforts to find a private-sector solution unsuccessful, AIG faced severe liquidity pressures that threatened to force it imminently into bankruptcy (more).”

2008-07 2008 Lehman Brothers failed. Bubble popped and money fled from oil investment. Trading value of oil dropped by 80% (Dicker 2011).

2008 Oil reached $147 a barrel (Dicker 2011).

2008-06 Federal Reserve Chairman Bernanke “singled out the role of commodity prices among the main drivers of price dynamics, underscoring the importance for policy of both forecasting commodity price changes and understanding the factors that drive those changes (Pesenti and Groen 2011-03 citing Bernanke).”

2008-04 The macroeconomic outlook changed rapidly and dramatically as the global economy experienced the near-collapse of trade volumes and the associated plunge in commodity prices was the harbinger of pervasive disinflation risks (Pesenti and Groen 2011-03).

2008 In the ten years after Born’ s 1998 proposal, the market in derivatives exploded from $27 trillion to one worth more than $ 600 trillion. By comparison, the entire U.S. economy was worth $ 14 trillion. Hirsch, Michael. 2010. Capital Offense: How Washington’s Wise Men Turned America’s Future Over to Wall Street. New Jersey: John Wiley.

2008-06 “NYSE Floor Brokers Get New Tools.” The New York Stock Exchange introduced two new technologies to give brokers on the NYSE trading floor the ability to trade algorithmically and to strengthen the brokers’ ability to locate large sources of liquidity. more

2008-06-17 Ross Levin, a Wall Street NYC hedge fund analyst with Arbiter Partners, who calls himself a “passive speculator in securities” met Lionel Lepine, a member of the Athabaskan Chipewyan First Nation whose family and friends living on the contaminated watershed upriver from the oil sands’ effluence are suffering from unprecedented numbers of cancerous tumours. Levin attended Calgary’s prominent energy investment forum and “found himself in the eye of a growing environmental storm battering Alberta’s oilsands — one of several clashes centred on the energy sector.”
read more | digg story

2008-04-02 – After two decades spent expanding in Britain, the United States and other developed economies, the world’s third biggest bank is shifting its ….. or if the government forces banks to separate their retail arms from investment banking, dubbed “casino banking” by some politicians. .

2008 PM Harper apologized for past treatment of Canada’s First Nations.

2008 Pollution of the Athabaskan River north of the oil sands

2008 Impatient development of nonrenewable resources in the oil sands.

2008-03-24 Reich, Robert B. 2008-03-24. Is the Game About to Stop? American consumers’ buying power was less than the goods and services the U.S. economy is capable of producing. Reich predicted fewer jobs, even less consumption which would lead to even fewer jobs and possible a recession which could become a full-fledged depression. Reich argued that fiscal and monetary policies could perhaps make up for consumers’ lack of buying power. American consumers were already deep in debt, their homes were losing value, their paychecks were shrinking.

2008 Meteoric rise of oil commodities market directly caused by irresponsible speculators playing with volatile, unpredictable hedge funds that play havoc with the market making a fortune for some while destroying economic, social and ecological environments all around them.

2008 Calgary has a high percentage of young millionaires with lots of disposable income. There are also c.4000 homeless people in Calgary, the oil capital of Canada. c. 40% of the homeless are working poor who are unable to afford housing.

2007-10-31 Meredith Whitney, an obscure analyst of financial firms for Oppenheimer Securities “predicted that Citigroup had so mismanaged its affairs that it would need to slash its dividend or go bust. It’s never entirely clear on any given day what causes what in the stock market, but it was pretty obvious that on October 31, Meredith Whitney caused the market in financial stocks to crash. By the end of the trading day, a woman whom basically no one had ever heard of had shaved $369 billion off the value of financial firms in the market. Four days later, Citigroup’s C.E.O., Chuck Prince, resigned. In January, Citigroup slashed its dividend (Lewis, Michael. 2008. The End).”

2007-08 Arnuk and Saluzzi argued in their white paper entitled Toxic Equity Trading Order Flow on Wall Street: The Real Force Behind the Explosion in Volume and Volatility” (2009-12-17) that electronic trading, the new for-profit exchanges and ECNs, the NYSE Hybrid and the SEC’s Regulation NMS all came together in unexpected ways in the late summer of 2007. This perfect storm caused the Volatility Index, [stock market volatility index (VIX) "fear gauge" measures the expectation of price movement over the next 30 days. The higher the reading, the more likely stocks are to move in one direction or another] to climb, trading volumes to increase explosively, stock prices and indexes to experience rapid change. “
This has resulted in the proliferation of a new generation of very profitable, high-speed, computerized trading firms and methods that are causing retail and institutional investors to chase artificial prices (Arnuk and Saluzzi 2009-12-17).”

2006-03-07 The merger of NYSE and Archipelago was completed forming the NYSE Group, Inc., a holding company that operates two securities exchanges: the NYSE and NYSE Arca, Inc. They are a leading provider of securities listing, trading and market data products and services (more).

2007-06-18 Wolf, Martin. 2007-06-18. “Unfettered finance is fast reshaping the global economy.” “In Rome everything is for sale.”

2007-01 “Both the switch to trading in penny increments in January 2007 and stepped-up activity by high-frequency traders have cut into dealer profits. That has made the dealers less willing to shoulder the entire burden of supporting the exchanges. Almost 90 percent of industry volume is now being traded in options subject to the “penny pilot.” With the minimum trading increment down from 5 cents to 1 cent in the most active options, competition has cut dealer spreads dramatically. “Options Market Makers Catch a Break on Fees as Customers Pick Up.” Traders Magazine

2006 “[F]lash orders – a key focus of the New York Times article, which prompted an almost instant response from politicians and regulators. Flash orders first appeared in US equity markets in 2006, with the launch of the Enhanced Liquidity Provider (ELP) programme by Direct Edge. The idea was that if an order had been sent into Direct Edge and not found a match, it would be shown to other market participants before being routed out to alternative markets, as would normally happen. In theory, more of the orders placed with Direct Edge would be filled, and more customers would have a shot at trading at the price they want (Wood, Duncan. 2009-09-04) “Murky business.” Risk magazine.” tags: Algorithmic Trading Topics: Equities, Trading

2006-2008 Mainly cautious elderly customers were ill-advised by Barclays between 2006 and 2008 to put money into high-risk investments Aviva Global Balanced Income or the Aviva Global Cautious Income funds. No one at Barclays lost jobs even though this scandal cost Barclays shareholders close to £80 million and inflicted untold damage on Barclays’ reputation. Read more

2005-12-15 NYSE Hybrid Market was launched, creating a unique blend of floor-based auction and electronic trading. NYSE Hybrid Market claimed to provide customers with more choices and greater flexibility in accessing the superior liquidity and best prices of the NYSE marketplace. In 2005, the combined dollar value of transaction volumes of the NYSE and NYSE Arca represented approximately $17.8 trillion dollars, which was greater than the value of trading of Nasdaq ($10.1 trillion), the London Stock Exchange ($5.7 trillion), the Tokyo Stock Exchange ($4.4 trillion), Euronext ($2.9 trillion) and the Deutsche Börse ($1.9 trillion) (more)

2005-06-29 70 FR 37496, 37627 Rule 603 — Distribution, Consolidation, and Display of Information with Respect to Quotations for and Transactions in NMS Stocks. “In Regulation Fair Disclosure, the SEC took the stand that firms cannot release fundamental information to a subset of investors before others. On the other hand, Rule 603(a) established a different approach to market data, whereby market centers could sell data directly to subscribers, in effect creating a tiered system of investors with respect to access to information about market events. Rule 603(a) prohibits an SRO or a broker-dealer from supplying the data via direct feeds faster than it supplies it to the Securities Industry Automation Corporation (SIAC) that processes the data and distributes the “tape.” However, the operation of processing and retransmitting data via SIAC appears to add 5 to 10 millisecond and hence subscribers to direct exchange data feeds “see” the information before others who observe the tape (more).”

2005-07-31 CEO, John Thain discussed NYSE plans to merge its floor-based trading system with a relatively new electronic market known as Archipelago creating a hybrid system that allows electronic, instantaneous and anonymous trades. Thain’s former employer, Goldman Sachs, was on both sides of the deal representing the NYSE and Archipelago. Goldman was the biggest NYSE seat holder, owned a specialist firm and 15% of Archipelago “NYSE chief: Hybrid trading system’s the way to go.”

2005Many banks operated proprietary trading units that were organized much like hedge funds. Risk exposures of the hedge-fund industry began to have a material impact on the banking sector, resulting in new sources of systemic risks (more).

2005 High-frequency trading accounted for 30% of daily volume in US stocks (Mackenzie, Michael; Grant, Jeremy. 2009-08-06. “The dash to flash.” Financial Times.)

2005 Direct Edge, a small, electronic trading company opened for business using high-frequency trading (lightning-fast computers equipped with sophisticated and powerful algorithms that are capable of executing trading strategies) and flash orders (literally flashing their orders to their own investors for about a tenth of a second before releasing it to the public market).

2005-07 S&P upgraded China’s sovereign rating by one notch to A-minus, citing China’s aggressive overhaul of its financial sector and improved profitability. China is rated ‘A2′ by Moody’s Investors Service and ‘A’ by Fitch Ratings. Liu, Henry C. K. World Trade Needs a Global Cartel for Labor (OLEC).

2005 According to one study, if the share of world trade and world gross domestic product for non-industrial countries had remained at its 2000 levels, then by 2005, real oil prices would have been 40 percent lower, and real metals prices 10 percent lower, than they actually were (Pain, Koske, and Sollie, 2006).  Since 2005, continued strong growth in the demands for resources of emerging market economies have likely put further considerable upward pressure on commodity prices  (Bernanke 2008-06-09). “

2004 The “demand for oil by members of the Organisation for Economic Co-Operation and Development (OECD) has been essentially flat since 2004 (Bernanke 2008-06-09). ”

2004-08-02 Revolutionary electronic trading practices transformed the stock market. The NYSE filed to expand using the NYSE Direct+® system. NYSE Direct+® eliminated limits on the size, timing, and types of orders that can be submitted via Direct+, significantly increasing the level of purely electronic trading at the NYSE.

2004 The “demand for oil by members of the Organisation for Economic Co-Operation and Development (OECD) has been essentially flat since 2004 (Bernanke 2008-06-09). “

2003  The price of oil had remained relatively stable from 1990 to 2003 when the price of oil became volatile. The price increased sixfold in five years then lost 80% of its value in 6 months (Dicker 2011:viii).

2001 There was “an overnight change in the trading patterns of the Nasdaq 100 Index which highlighted the competitive impacts of the SEC reforms and foreshadowed the dominance of the high frequency traders and all-electronic marketplaces. At the time, the ETF for the Nasdaq 100 Index (then known as the QQQ) was the most actively traded security and was primarily traded on the American Stock Exchange which utilized a manual floor-based specialist system. Using ATSs, the high frequency traders began using their efficient automated trading systems to narrow the quoted spreads in the QQQ from several pennies down to tenths of a penny, saving investors millions in the process (Traders) .”

Within months, investors voted with their feet and made the electronic markets that featured the liquidity and narrower spreads of the high frequency traders the dominant venues for the QQQ. Investors never looked back. Ultimately, the NYSE and the Nasdaq Stock Market were compelled to purchase these electronic markets that catered to high frequency traders (Archipelago was purchased by the NYSE and INET by the Nasdaq Stock Market). The traditional, uncompetitive Wall Street market maker model was replaced and the exchanges were transformed to open, fair and transparent electronic marketplaces.

2000 More than 90 foreign futures exchanges emerged with the ever-increasing demand for new financial instruments “to hedge against fluctuating interest rates, changing foreign exchange rates and institutional securities portfolios (Bernstein 2000:46).

2000 The Chicago Mercantile Exchange (CME) trades futures in livestock futures, currency futures, interest rate futures, stock index futures (Bernstein 2000:70).

1999 The most actively traded future contracts were interest rates, futures, stock index futures, energy futures, currency futures and agricultural futures (Bernstein 2000:72).

1998 Long Term Capital Management collapsed.

1998Security and Exchange Commission ruling allowed electronic communication networks (ECN’s for short) to trade equities in competition with the traditional exchanges. New technologies made the automation possible resulting in the development of high frequency trading: Lightening-quick computers, aided by powerful algorithms, buy and sell stocks based on price or other markers (more).

1998 Brooksley Born, chairman of the Commodity Futures Trading Commission declared that the unregulated regulation of private derivative contracts could “pose grave dangers to our economy.” He argued forcefully for regulation of private derivative contracts but lost to Alan Greenspan and Robert Rubin who were against policing the deals.

1990 The price of crude oil rose dramatically when Hussein invaded Kuwait.

1986 The total volume of futures contracts trading was 184 million and the T bonds were among the most actively traded future contracts (Bernstein 2000:71).

1989 Michael Lewis’ novel entitled Liar’s Poker was published. He intended to write a period piece about the 1980s in America. He had expected readers to be outraged that in 1986, the C.E.O. of Salomon Brothers, John Gutfreund, was paid $3.1 million. He expected readers to be horrified that one of the traders, Howie Rubin, had moved to Merrill Lynch, where he lost $250 million. He expected readers to be shocked to learn that a Wall Street C.E.O. had only the vaguest idea of the risks his traders were running.” Writing in 2008 he expressed dismay that Wall Street continued for another 20 years and the public were more in awe than angry. Read more: http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom#ixzz1Qd1u5MLZ

1987 The World Commission on Environment and Sustainable Development (Brundtland Commission) defined sustainable development as meeting the needs of the present without compromising the ability of future generations to meet their own needs.

1987-10-19 “The Dow Jones Industrial Average tumbled more than 20%, and the swoon extended into the following day, before a rebound. Floor traders, working by telephone, dominated the action and computer-generated trading was still in its infancy. Dark pools and high-frequency trading were the stuff of science fiction. Trading reached 600 million shares, according to the SEC (source).”

1982 Futures trading in the US was self-regulating and anyone in the business had to become a member of the National Futures Association (NFA).

1970s The Bretton Woods system broke down in the early 1970s. This was followed by a period of financial market liberalization and deregulation, by a surge of private capital flows and by the increasingly global reach of financial institutions.

1974 The US Congress passed the Commodity Futures Trading Commission Act and established Commodity Futures Trading Commission (CFTC) to protect participants in the futures market from fraud, deceit and abusive practices such as unfair trading practices (price manipulation, prearranged trading, trading ahead of a customer), credit and financial risks, and sales practice abuses (Bernstein 2000:32). Individual nation states have similar regulating bodies.

1973/4 The International Energy Agency (IEA) was founded as an autonomous organisation to ensure reliable, affordable and clean energy for its 28 member countries and beyond. The IEA’s initial role was to help countries co-ordinate a collective response to major disruptions in oil supply through the release of emergency oil stocks to the markets. The Executive Director in 2011 is Nobuo Tanaka “Total oil stocks in IEA member countries amount to over 4.1 billion barrels, and nearly 1.6 billion barrels of this are public stocks held exclusively for emergency purposes. IEA net oil-importing countries have a legal obligation to hold emergency oil reserves equivalent to at least 90 days of net oil imports. These countries are holding stock levels well above this minimum amount, currently at 146 days of net imports (http://www.iea.org)”

1972 The total volume of futures contracts trading was 18 million and the top ten most actively traded future contracts were agricultural futures (Bernstein 2000:71).

1970s There was increasing volatility in international currency exchange rates as the Bretton Woods agreement began to break down. Business people transferred risk of volatility in international markets by hedging with speculators willing to take the risk. Futures markets began to expand into foreign currencies as fluctuated wildly competing against each other and the US dollar.

1960s Futures trading, also known as commodities trading, the final frontier of capitalism, became a popular speculative and investment vehicle in the US in the 1960s (Bernstein 2000:1).

1960s Futures trading, also known as commodities trading, the final frontier of capitalism, became a popular speculative and investment vehicle in the US in the 1960s (Bernstein 2000:1). These financial instruments offer unlimited profit potential with relatively little capital. Speculators are drawn to the possibility of quick money or what I like to call impatient money. The great wealth accumulated from speculative financial instruments has spawned careers in brokerage, market analysis, computerized trading, computer software and hardware, accounting, law, advertising which themselves subdivide into more recent opportunities such as those related to risk-management.

1929-30 “As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth — not of existing wealth, but of wealth as it is currently produced — to provide men with buying power equal to the amount of goods and services offered by the nation’s economic machinery. Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.” Eccles, Marriner S. 1951. Beckoning frontiers: Public and personal recollections Ed. Hyman, Sidney. Alfred A. Knopf.

1919 – 1945 The Chicago Mercantile Exchange (CME) traded futures in eggs, butter, apples, poultry and frozen eggs (Bernstein 2000:70).

1865 The Chicago Board of Trade (CBOT) organized trading of futures contracts.

1848 The Chicago Board of Trade (CBOT) was formed as a price risk occurred in the grain markets of Chicago. It was a cash market for grain. Forward or “to-arrive” contracts began trading at the CBOT almost immediately.

1710 The first modern organized futures exchange began with the Dojima Rice Exchange in Osaka, Japan.The Japanese feudal landowners began to use certificates of receipt against future rice crops. As these futures certificates became financial instruments in the general economy the value of the certificates would rise and fall as the price of rice fluctuated. The Dojima Rice Exchange emerged as the world’s first futures market where speculators traded contracts for the future delivery of rice or “certificates of receipt.” The Japanese government outlawed the practice when futures contracts (where delivery never took place) began to have no relationship to the underlying cash value of the commodity leading to wild and unpredictable fluctuations (Bernstein 2000:30).

Actors and Actants

Electronic Communication Network (ECN) “An electronic system that attempts to eliminate the role of a third party in the execution of orders entered by an exchange market maker or an over-the-counter market maker, and permits such orders to be entirely or partly executed.”

High-frequency trading firms (they self-identify as Automated Trading Professionals) use high-frequency techniques (software-based mechanisms: high frequency algorithmic trading) with real-time, co-located, high-frequency (sub-millisecond) trading platform—one (data collected then orders: created-routed-executed). Wall Street banks and hedge funds also use high-frequency techniques but new (ie emerged formed in c. 1999-2001) small (most have as few as 12 to 100 employees), independent firms account for most high-frequency trading, handling 60 % of the 7 B shares that change hands daily on US stock markets on Wall Street and hedge funds. These high-frequency trading firms have formed a trade group called Principal Traders Group in an effort to hold off regulators who want to curb their activities. The members of the FIA Principal Traders Group is the industry’s response to the Joint CFTC-SEC Advisory Committee examination of the market structure and policy issues arising from the extraordinary market turmoil that occurred on May 6, 2010. See (Bowley, Graham. 2011-07-18. “ Split-second traders aim to polish image.New York Times.) High-frequency trading firms using high-frequency techniques (software-based mechanisms: high frequency algorithmic trading) earned $12.9 billion in profit in the last two years (2009-2011), according to TABB Group, a specialist on the markets. TABB Group content focused on the business and technology issues facing US equity and options trading.

RGM Advisors, is a high-frequency trading firm in Austin, Texas. RGM CEO Richard Gorelick, is leading his company to seek a higher public profile.

Low latency Algorithmic Trading is used to process market updates and turn around orders within milliseconds. Low latency trading refers to the network connections used by financial institutions to connect to stock exchanges and Electronic communication networks (ECNs) to execute financial transactions. With the spread of computerized trading, electronic trading now makes up 60% to 70% of the daily volume on the NYSE and algorithmic trading close to 35%. Trading using computers has developed to the point where millisecond improvements in network speeds offer a competitive advantage for financial institutions. (Low latency is also being discussed in the advertising community, as a form of advertising that responds rapidly to consumer inputs, often from tweets.)

International Energy Agency (IEA) The International Energy Agency (IEA) is an autonomous organisation which works to ensure reliable, affordable and clean energy for its 28 member countries and beyond. Founded in response to the 1973/4 oil crisis, the IEA’s initial role was to help countries co-ordinate a collective response to major disruptions in oil supply through the release of emergency oil stocks to the markets. It is at the heart of global dialogue on energy, providing authoritative and unbiased research, statistics, analysis and recommendations. The IEA is committed to keeping the oil supplies well-stocked. The Executive Director in 2011 is Nobuo Tanaka “Total oil stocks in IEA member countries amount to over 4.1 billion barrels, and nearly 1.6 billion barrels of this are public stocks held exclusively for emergency purposes. IEA net oil-importing countries have a legal obligation to hold emergency oil reserves equivalent to at least 90 days of net oil imports. These countries are holding stock levels well above this minimum amount, currently at 146 days of net imports (http://www.iea.org)”

Henry C.K. Liu “is an independent commentator on culture, economics and politics. Born in Hong Kong and educated at Harvard University in architecture and urban design, Liu developed an interest in economics and international relations while pursuing interdisciplinary work on urban and regional development as a professor at UCLA, Harvard and Columbia universities. He was a planning/ development advisor to the late Winthrop Rockefeller, governor of Arkansas, and has received a national urban design award. Liu is currently the chairperson of a New York-based private investment group, a contributor to Asia Times Online and a visiting professor of global development at the University of Missouri at Kansas City. He is an occasional advisor on economic policy to several governments of emerging economies. Liu coined the term “dollar hegemony” to explain that the dollar, a fiat currency since 1971 and the major reserve currency internationally, distorts global trade and finance. Liu is a critic of central banking. He also calls for the use of sovereign credit in lieu of foreign capital for financing domestic development in developing countries. Liu has also been vocal in his critique of Chinese economic policy, which he argues includes imbalances that result in severe income disparity and environmental neglect. In a series of articles in Asia Times Online, Liu proposed the establishment of the Organization of Labor-Intensive Exporting Countries (OLEC), an international cartel, to restore the balance of market power between capital and labor in the globalized economy. He blogs at henryckliu.com. Huffington Post.”

Soft commodities:

OTC Over-the-counter derivatives markets engage in off-market trading for oil which is unregulated. Estimates for the OTC derivative market for all assets range upward of $600 trillion. See (Edison Electric Institute (EEI). 2010-01. “OTC Derivatives Reform: Energy Sector Impacts. p. 1.”). “Use of Financial Derivatives: A typical, large independent oil & natural gas exploration and production company regularly deals with volatility in oil & natural gas exploration. Such companies regularly make extensive use of financial derivatives with the discrete purpose of ensuring a stable cash flow from which they can consistently fund their capital program to find and bring much needed energy resources to market. Although they may make use of exchange-traded instruments, many of their financial transactions are concluded overthe-counter (OTC) under bilateral credit agreements. These frequently use the OTC markets for efficiency and economic reasons and allows the companies to: 1) customize the instrument specifically to operations;
2) reduce the need for cash by permitting more flexibility in the types of collateral leading to a more efficient use of capital and greater liquidity; 3) provide credit exposure diversification; and 4) have the ability to modify credit arrangements depending on a variety of factors during the term of a trade (more).”

Universal Banking Model – Investment and retail banking in one organisation. There is widespread concern that casino banking endangers security of traditional retail banking.

Webliography and Bibliography

Bernstein, Jake. 2000. How the Futures Markets Work. New York Institute of Finance.

Although it is quite old for the fast-paced risk management industry, there are certain basics that ring true. He briefly traced the history futures contracts leading to the volatile environment where agricultural futures were replaced by the less predictable currency markets. Of course, his book was written long before the meteoric rise of private equity funds. My concern remains with the absent ethical component on trading floors. Ethical responsibilities are as elastic as the regulations that govern the centuries old practice of hedging. In the period of late capitalism and the emergence of risk society, the cost of destructive unintended byproducts have created havoc in ways that far exceed the commodities/service value. The road to profits and impatient money, is paved with casualties. Berstein’s facts of market life are telling. He encourages simple methods and systems which require few decisions and little mental conflict. Too much thought is not conducive to successful trading. Too much analysis costs lost opportunities. Keep systems simple. Control your emotions. Practice caring less so that you remain more objective. Don’t ask why. Knowing why may hinder you more than it will help you. Patterns are the best indicators available (What feeds into a “pattern” however is not a science). Timing is what makes money in the futures market (Bernstein 2000:282-3). In other words, futures’ gurus encourage young hedge fund analysts to not think too much about factors such as displacement of peoples, the degradation of living conditions and the way in which they unwittingly contribute to making vulnerable ecologies and peoples even more vulnerable. Their gurus tell them to not think about the impact of their actions. They are told to not ask why the prices of essential commodities like fuel and food that they are playing with, are pushing certain groups into unimaginable levels of social exclusion. In the end groups at-risk to health degradation are always those least able to protect themselves. How convenient that the gurus do not factor in these social issues. They are entirely absent from finance reports. But then a lot of information is purposely not included in financial and business reports. Bernstein argues that the simpler systems that take fewer things into consideration will lead to more profits. Yet when he lists off all the potential factors in operation in even a simple fundamental analysis, it is not at all simple. It begins with the highly complex. The algorithms involved may appear to be simplified through the use of databases that seem to generate accurate, objective hard facts. In reality, the accuracy of any query depends on what was fed into it.

Bernanke, B. S. 2008. “Outstanding Issues in the Analysis of Inflation.” Speech at the Federal Reserve Bank of Boston. 53rd Annual Economic Conference. Chatham, MA.

Blais, Javier. 2011-06-01. Commodity swings expected after US storms forecast.” Financial Times. London.

Coyle, Diane. 2011. The Economics of Enough: How to Run the Economy as If the Future Matters. Princeton University Press.

nature of global capitalism, fiscal policy, inequality and the environment with reflection on civil society, economic growth ought not to be a policy goal, use of a greater range of economic indicators–she backs output growth as an objective, bond holders are safe; citizens are not; beyond traditional measures of debt in thinking about future obligations; top-rank economist’s view from the summit, challenge the neo-classical economic purist; economics and sustainability; serious and difficult changes made to economic systems’ structure and function; Herman Daly’s Steady-State Economics; long-run development; resource depletion, population growth, world poverty, rising debt, rates of innovation;

Cuthbertson, Richard. 2008-06-17. “Energy battles boiling over: A Wall Street analyst attending Calgary’s prominent energy investment forum found himself in the eye of a growing environmental storm battering Alberta’s oilsands — one of several clashes centred on the energy sector Monday.Calgary Herald.

Eccles, Marriner S. 1951. Beckoning frontiers: Public and personal recollections Ed. Hyman, Sidney. Alfred A. Knopf.

Flood, Chris. 2009-10-30 “Markets: Oil dips after US GDP boost.” Financial Times.

Hirsch, Michael. 2010. Capital Offense: How Washington’s Wise Men Turned America’s Future Over to Wall Street. New Jersey: John Wiley.

Lewis, Michael. 1989. Liar’s Poker. W.W. Norton & Company.

Martin, Roger L. 2011-05. Fixing the Game: How Runaway Expectations Broke the Economy, and How to Get Back to Reality. Harvard Business School.

Orphanides, Athanasios, and John C. Williams (2007). “Robust Monetary Policy with Imperfect Knowledge,” Leaving the Board Journal of Monetary Economics, vol. 54 (July), pp. 1406-35.

Pain, Nigel, Isabell Koske, and Marte Sollie (2006). “Globalisation and Inflation in the OECD Economies,” Leaving the Board OECD Economics Department Working Paper Series 524. Paris:  Organisation for Economic Co-operation and Development, November.

Pesenti, Paolo A. Groen, Jan J.J. 2011-03. Commodity prices, Commodity Currencies, and Global Economics. Directorate-General for Economic and Financial Affairs. European Commission. Economics Papers 440. Brussels. Commodity prices,  forecasting, exchange rates, factor models, PLS regression

Powell, Barbara. 2011-06-28. “Gasoline Futures Gain as Crude, Equities Advance, Dollar Drops.” Bloomberg.

Rich, Robert W., and Charles Steindel (2007), “A Comparison of Measures of Core Inflation,” Federal Reserve Bank of New York, Economic Policy Review, vol. 13 (December).

Wallace, Lane. 2009-07-07. “The Uncommon Navigator: What Wall Street Should Learn from the NFL.” The Atlantic.


WORK IN PROCESS UNDER CONSTRUCTION

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The following dates and events are a collage of data from various researchers, journalists, etc. compiled in reverse chronological order by speechless as a personal research tool. At the last edit in June 2012 there may still be incomplete referencing. This is unintentional. Like all my posts it may at any time by updated and modified.

2012-08-20 “The Calgary Homeless Foundation’s last count was conducted Jan. 18, when it was –32 Celsius and at least 3,190 people were homeless — an 11.4 per cent decrease from the May 2008 count.” (Ferguson, Eva. 2012-08-20. “Homeless count in Calgary finds fuller shelters: Growing economy lures more job seekers to Calgary.Calgary Herald.)

2011-06-09 One of the major reasons Canadian cities, including Calgary, are unable to implement sustainable solutions to affordable housing is the lack of money and power at the municipal level. In an article published in The Economist entitled “Canada’s cities Poor relations: Mayors need more money and more powers” there is a list of urban crises including growing ghettos of crime, poverty and drug addiction; soaring house prices, increasing homelessness, the middle class fleeing to the suburbs, deteriorating civic buildings, roads, bridges, sewage systems. Provincial governments have neglected their responsibility for such matters as social housing, welfare, mental illness, drug addiction and policing. “Canada’s big cities need at least C$238 billion to repair and expand infrastructure, according to the Federation of Canadian Municipalities. Municipalities get only eight cents out of every tax dollar. Their revenues come mainly from property taxes. Under constitutional arrangements that date back to the time when Canada was largely rural, mayors have fewer powers than their counterparts in some other developed countries.”

2011-06-06 In the statement released by Berry Vrbanovic, President of the Federation of Canadian Municipalities (FCM) on the 2011-06 Federal Budget Commitment to Develop a New Long-Term Infrastructure Plan for Cities and Communities, Vrbanovic applauded the federal Government for a budgetary commitment to a shift in the municipal-provincial-federal and private sector partnerships that will lead to “a reversal in the decline in our aging infrastructure, and also to keep police on the streets, fix cracks in our housing system, and protect core services.”

2011-06-04 In a recent poll conducted by the Canadian Union of Public Employees 89% of those surveyed supported increased federal and provincial funding for municipal governments.

2011 The City of Calgary is currently involved in the following affordable housing developments: Manchester North Comprehensive Development, Crestwood (Millican-Ogden community), Vista Grande (Vista Heights community), The Bridges: Affordable Housing (Bridgeland-Riverside community), Inglewood Residence Housing Development (Inglewood Community). These initiatives will create approximately 255 new homes for families, singles, couples and individuals with disabilities. It is curious that on closer inspection many of these are already completed. What are the current (2011-06) affordable housing developments?

2011-05-04 Alberta put out a $100-million request for proposals through the provincial 2011-12 Housing Capital Initiatives grant program. A minimum of 660 housing units could be developed, depending on the projects funded. In addition to this year’s funding, more than $1 billion has been invested in more than 10,000 housing units in Alberta since 2007. Increasing the supply of housing for lower-income Albertans is a key part of preventing and ending homelessness, under Alberta’s 10-year plan to end homelessness (more). The provincial government has committed $2.2 million to a 29-unit low income housing project to be run by the Meadowcroft Housing Society in a northwest neighbourhood. The Brentwood Apartments, located at 13535 115th Ave, an ideal location for low-income families (near a major shopping centre, close to the big west Edmonton bus terminal, across the street from Coronation Park). The provincial money covered about 45 % of construction costs for the project. The building contains two bachelor, and 27 one-bedroom units. The suites were supported through a previous housing capital initiative and include barrier-free units. The built-in green features, such as solar power, high-efficiency windows, and geothermal heating, will help lower utility costs.

2011-04-29 the Federation of Canadian Municipalities (FCM) calls for all parties in the House of Commons to turn campaign promises to cities and communities into action. “Forty per cent of federal investments in municipalities will expire in the next 36 months (FCM 2011-04-06),” including investments in front-line policing, infrastructure, public transit and affordable housing.

2011 Alberta > Provincial-Territorial Program Delivery> Under Canada’s Economic Plan > Alberta. “More than $1.3 billion over two years will be delivered by and cost-shared with provinces and territories on a 50/50 basis. As a result of this joint investment, more than 9,200 construction and renovation projects are underway or have been completed across the country including 467 projects for low-income seniors and persons with disabilities, and the renovation and retrofit of existing social housing projects in Alberta. An additional $200 million is being invested to address housing needs in the North, resulting in 213 projects underway or completed. Canada Mortgage and Housing Corporation (CMHC) & Indian and Northern Affairs Canada (INAC) Projects: Renovation and Retrofit of Existing Social Housing: $150 million will be delivered directly by CMHC to renovate and retrofit existing federally-administered social housing. To date 1,310 projects are underway or completed, including the renovation and retrofit of 122 existing social housing projects in Alberta. Addressing First Nations Housing Needs: A total of $400 million over two years will be delivered through CMHC and INAC to create new, federally-assisted on-reserve housing and to renovate and retrofit existing social housing. To date, CMHC has invested in the construction of 275 new social housing projects and the renovation and retrofit of existing social housing projects in Alberta. Municipal Infrastructure Lending Program: Up to $2 billion is available over two years in direct, low-cost loans to municipalities for municipal housing-related infrastructure. To date, 273 low-cost loans totalling more than $2 billion have been approved, including 2 low-cost loans approved for a total of $ 5.68 million in Alberta.” It is interesting to examine more closely the interactive map showing federal partnerships in Calgary. I found only one small affordable housing project, numerous recreation facilities upgrades, etc.

2011-03 Under the “Supporting Vibrant Communities” in the 2011 Federal Budget, the Next Phase of Canada’s Economic Action Plan announced additional support for culture and communities with new budget measures, including support for Aboriginal people, such as: Marking the 100th anniversary of the Grey Cup and the Calgary Stampede with $5 million toward each of the anniversary celebrations. “The Next Phase of Canada’s Economic Action Plan: A Low-Tax Plan for Jobs and Growth.”

2011-03-18 “The 14th Street N.W. Brenda Strafford Foundation Affordable Housing Initiative. The complex will feature 85 two bedroom apartments of which 33 units are targeted to support women and families leaving domestic violence. The Calgary Housing Company currently provides 24 units of housing to Foundation clients. Funding for the program included an additional from the $14 million Brenda Strafford Foundation and $7.9 million in capital funding from the federal and provincial governments under the Canada-Alberta Affordable Housing Partnership Initiative. (Calgary Herald 2008-06-27) .” The Canada-Alberta Affordable Housing Agreement is comprised of a commitment of $98.62 million from each of the two senior levels of government. In total, the federal and provincial governments have invested more than $197 million in the program, which provided over 3,600 affordable housing units in Alberta. (more)

2011-02 Of the 506,607 mortgages in 2011-02 in Alberta, 4,212 or 0.83% are in arrears compared to a national average of 0.45%. according to the latest data from the Canadian Bankers Association (2011-02). “Homeowners in Alberta this year reached a record high for percentage of mortgages in arrears in any month since statistics were kept by the association in the province starting in 1990, reaching 0.84% of total mortgages in January. The statistic shows Albertans are about twice as likely to fall behind as the national average of 0.45%. Manitoba had the lowest percentage, at 0.29% in arrears this year thus far. The national high was in January 1997, when 0.65% of mortgages were in arrears (CBC 2011-05-05).”

2011 Alberta government committed to a 10-year plan to end homelessness.

“There continues to be too much reliance on the for-profit sector in addressing affordable housing needs and too little investment in this issue. The waiting lists for low-income affordable rental housing are years long in the major cities of this province. Meanwhile some of our most vulnerable citizens, including children, people with mental illnesses, and seniors, are left in housing that is either far too expensive or far too poor in quality, and they all pay the price in their health and in their safety.This government eliminated funding of important social housing years ago, and a huge homelessness and housing problem soon developed in our province. With the return of a stronger economy under way and more people coming to Alberta’s labour market, we will see more difficulties (Brian Mason 2011).”

2011 Canada’s Economic Action Plan provides a meagre “$850 million to provinces and territories, over two years, for the renovation and retrofit of existing provincially/territorially administered social housing. Overall, the Economic Action Plan includes $2 billion for the construction of new and the renovation of existing social housing, plus up to $2 billion in low-cost loans to municipalities for housing-related infrastructure. Canada’s Economic Action Plan builds on the Government of Canada’s commitment in 2008 of more than $1.9 billion, over five years, to improve and build new affordable housing and help the homeless.”

2010-11-04 Ivy Zhang, Ivy; Walters, Patrick. “Why does the City of Calgary experience financial stress in providing services to Calgarians, even in good economic times?” A short answer is that, Calgary over-contributes to the balance sheets of the federal and provincial governments, leaving the local government with less than adequate revenue to fund its spending responsibilities.. . . [S]trong labour market conditions in Calgary have acted as a magnet for workers from outside the region. This has created an equally high demand for shelter and support services to address issues such as homelessness and affordable housing – issues that need all orders of government to address. Downloading of many government housing and support programs.”

2010- In Edmonton After the 2009 downturn, it was single-family subdivisions that came back quicker and stronger, representing the bulk of the 34 per cent increase in residential construction permits last year.

2010 In Calgary nearly 6,000 single-family detached houses were built in Calgary (most in the NESW suburbs). There were only 3,000 new multiple-family units under construction.

2010 Attainable Homes Calgary Corporation (AHCC) is a non-profit organization and wholly owned subsidiary of The City of Calgary. The goal of AHCC’s Attainable Home Ownership Program is to develop 1,000 well-appointed, entry-level homes at a price attainable for individuals and families earning $53,000 – $80,000 in household income annually. Attainable Homes partnered with Intergulf-Sidex developers to build the Beacon Heights multi-family complex.

2009 “Canada is one of the few countries in the world without a national housing strategy (United Nations, 2009). Many of the federal governments’ expenditures are cost-sharing, one-time only funding initiatives that lack long-term leadership on homelessness ( United Nations (2009). Report of the Special Rapporteur on adequate housing as a component of the right to an adequate standard of living, and on the right to non-discrimination in this context, Miloon Kothari. Based on Mission to Canada 9–22 October 2007.”

2009 “The highest average monthly rents for two-bedroom apartments in new and existing structures were in Vancouver ($1,169), Calgary ($1,099), Toronto ($1,096), and Ottawa ($1,028). The apartment vacancy rate in the Calgary CMA rose 3.2 percentage points from 2.1 per cent in October 2008 to 5.3 per cent in October 2009. Average rent for a two-bedroom unit was $1,099 per month in October 2009, down from $1,148 in October 2008. The vacancy rate for row (townhouse) rentals was 4.7 per cent in 2009, representing an increase of two percentage points from the previous year. Calgary’s 2009 purpose built rental stock had 684 fewer apartments and nine more row units than in 2008 (more).”

2008-09 The Government of Canada announced $1.9 billion, over five years, for housing and homelessness programs for low-income Canadians. As part of this investment, the Affordable Housing Initiative (AHI) was extended until March 31, 2011. CMHC. Affordable Housing Initiative

2007 http://www.calgary.ca/docgallery/bu/olsh/louisedocs/LAS2007-111.doc.pdf

2007 “Since 2000, Supporting Communities Partnership Initiative (SCPI) provided approximately $850 million in funding for strategic investments that address homelessness (Falvo 2007).”

2007 Nick Falvo (2007) presented various models for expenditure of a $100 million annual input to affordable housing. “Model 1: $125,000 of equity (i.e., up-front cash) provided at the development stage would be sufficient to create a 450-square-foot bachelor unit of non-profit housing in Toronto that would ultimately require monthly rent equivalent to a single welfare recipient’s (no dependents) shelter allowance from Ontario Works (c.$342/month). This model estimates a $25,000 cost for land, $70,000 for construction and “hard costs,” and $30,000 for soft costs. It also estimates that the units last only 30 years and then lose all of their value. $100,000,000.00 / $125,000 = 800 x 30 = 24,000 household years. $100 million spent on building non-profit housing provides sufficient equity to build roughly 800 bachelor units for 800 core-need individuals. Model 2: Provide an average monthly rent supplement c. government $500 or $6,000 per person per year. $100 million spent on rent supplements provides annual, one-time funding to take roughly 16,667 core-need individuals (most of whom are single) off the street, into shelter. Model 3: $166,000 of equity to create a 2-bedroom unit. The Math: $100,000,000.00 / $166,000 = 602 x 30 = 18,060 household years. $100 million foregone on tax credits awarded to individuals or corporations could provide sufficient equity to build roughly 602 bachelor units for 602 core-need households. $100 million in foregone tax revenue offered through a basic refundable tax credit program provides annual, one-time funding to 55, 556 welfarerecipient households (Falvo 2007).””

2007 “The persistence of poverty, especially in a wealthy and industrialized nation like Canada, is clearly regarded by the treaty bodies as a human rights failure. http://www2.ohchr.org/english/bodies/cedaw/docs/ngos/PHRC_Canada42.pdf” (See “The Consensus on Canada.” The treaty bodies have repeatedly expressed grave concern, particularly about disastrous levels of homelessness (CESCR 2006, paras. 28, 62; CESCR 1998, paras. 24, 34, 35, 46) and resulting damaging effects, including damage to health (CESCR 2006, para. 57; CCPR 1999, para. 12), lack of adequate housing, especially for children and youth (CESCR 1998, para. 35, CRC 1995, para. 17), Aboriginal peoples (CESCR 2006, para. 24; CRC 1995, para. 17), and women (CESCR 2006, para. 26; CEDAW 2003, paras. 383, 384). http://www2.ohchr.org/english/bodies/cedaw/docs/ngos/PHRC_Canada42.pdf

2005 “Armine Yalnizyan pointed out – Canada had a population of 31 million. 1.7 million Canadians of a total population of 31 million were underhoused or non-housed (Canadian Housing and Renewal Association). That’s 5.5% of the Canadian population without safe, decent and affordable housing (Crowe, Cathy. 2005-01http://tdrc.net/resources/public/Crowe-Newsletter_01-05.htm).”

2006-06 “Municipalities have been under-investing in infrastructure because of fiscal constraints. A number of cities have attempted to measure the magnitude of this infrastructure gap or deficit. The City of Calgary currently has a shortfall, or infrastructure gap, of $5.4 billion over the next ten years (FCM. 2006-06.“Our Cities Our Future Addressing the fiscal imbalance in Canada’s citie today”).”

2006 Edmonton and Calgary combined account for 64.5% of Alberta’s GDP (Conference Board of Canada).

2006-06-22  “While the City of Calgary encourages builders and developers to create affordable housing options (the Planning and Regulation section of the city’s affordable housing strategy states that a primary goal is to “encourage competition and choice in the housing marketplace”) it has yet to implement any firm legislation or policies in this regard. The Municipal Government Act of Alberta prevented cities within the province from dictating affordable housing policies to any private builder or developer. The Act was due for review in November 2006, leaving the door on affordable housing legislation wide open (Evdokimoff 2006-06-22.”

Pomeroy, Steve. 2005-03. “The Cost of Homelessness: Analysis of Alternate Responses in Four Canadian Cities.” Prepared for National Secretariat on Homelessness.

2005Looking Ahead, Moving Forwardhttp://www.calgary.ca/DocGallery/BU/mayor/councils_priorities.pdf

2005 Calgary’s “homeless population grew by 49 per cent between 2002 and 2004; in 2003, two-thirds of Calgary’s poor were ‘working poor’ who received no income support; and close to ?ve per cent of Calgarians went to the Inter-Faith Food Bank for help “Looking Ahead, Moving Forward 2005“.

2004 There were 2,600 homeless people in Calgary (more).

2004-05 “Societal Costs of Homelessness.” Prepared for the Edmonton Joint Planning Committee of Housing and the Calgary Homeless Foundation, by IBI Group.

2005 “Outside the framework of the AHI, $1.6 billion over two years was pledged in the 2005 NDP/Liberal budget (a.k.a., Bill C-48). Most of this money was allocated into three housing trust funds by the Harper government in the 2006 federal budget. While not part of the AHI, this has added momentum on the affordable housing front. (2007). The leader of Canada’s NDP agreed to support the federal budget in 2005 if an additional $1.6 billion was allocated for affordable housing.”

2005 Social Researchers Sawatsky and Stroick (2005) presented their report entitled Thresholds for Locating Affordable Housing: Applying the Literature to the Local Context. City of Calgary.

“Canada stands out as one of the few Western nations that rely almost completely on the market mechanism to supply, allocate, and maintain its housing stock (Scanlon and Whitehead, 2004). The market is the mechanism by which about 95% of Canadian households obtain their housing (Hulchanski 2005).holds for Locating Affordable Housing: Applying the Literature to the Local Context (Hulchanski, David J. 2005-01. “Rethinking Canada’s Housing Affordability Challenge.” Discussion paper. For the Government of Canada’s Canadian Housing Framework Initiative. p. 1).”

2005 Ecological Footprint study found that Calgary residents have the highest Ecological Footprint of any Canadian city at 9.9 global hectares per person – a lifestyle that, if everyone lived that way, would require five Earths to support. 2004

2005Straight talk about affordable housing.”

2005-07-04 “Acquisition of Affordable Housing Lands for Municipal Purposes.” Policy Number: AMCW001; Report Number: LASC2005-123; Approved by:Business Unit: Corporate Properties & Building.

2004-2005 Affordable Housing Initiative (AHI) Phase II introduced new programs in the areas of home ownership programs, targeting of AHI-funded programs, cost-sharing arrangements and provision of rent supplements.

2004 Affordable Housing is a Council priority as identified in Looking Ahead, Moving Forward 2002-2004

2004-06-07, in response to the lack of new units, Council directed Administration to develop a short term affordable housing development strategy as phase 1 of a larger five year Sustainable Resource Management Plan (LASC2004-155). http://www.calgary.ca/docgallery/bu/cityclerks/council_policies/amcw001.pdf

2004 CPS99-39 & CPS2002-57 directed Administration to identify and set aside City owned sites for future affordable housing initiatives. http://www.calgary.ca/docgallery/bu/cityclerks/council_policies/amcw001.pdf

2004-07-24 The City of Calgary Council approved a short-term affordable housing development strategy, LAS2004-178 “Calgary’s Affordable Housing Sustainable Resource Management Plan.”as the first phase of a five-year Affordable Housing Sustainable Resource Management Plan. Council directed City administration to: (1) take a leadership role in the development of non-market housing; (2) solicit development proposals from the private sector to create new non-market housing units; and (3) identify City owned surplus sites to support the development of City led social housing initiatives (Sawatsky and Stroick 2005).”

2004-07-24 The City of Calgary Council approved LAS2004-178 Affordable Housing Sustainable Resource Management Plan – Phase 2: Short Term Development Strategy 2004. Council directed Administration to “take a leadership role in the development of 200 units of affordable housing annually to maximize the Affordable Housing Partnership Initiative funding”.

2003 “Cities experienced significant cuts to the social assistance systems in the mid 1990s. The reduction of income supports is universally seen as one of the main reasons for high poverty rates and the growing income gap. (ARUNDEL, ET AL, 2003) (more).”

2003-06-17 TD Economics. “Affordable Housing in Canada: in Search of a New Paradigm.” Urban areas comprised a staggering 80 per cent of Canadian economic activity and employment. Working to find solutions to the problem of
affordable housing is a smart economic policy. An inadequate supply of housing can be a major impediment to business investment and growth, and can influence immigrants’ choices of where to locate. Implementing solutions to resolve this issue ties in well with the TD goal of raising Canada’s living standards and overall quality of life.”

2003 Affordable Housing Initiative (AHI) Phase II began with a meagre federal commitment of $320 million nationwide to provide additional funding for housing targeted to low-income households in communities where there is a significant need for affordable housing. Under Phase II the maximum federal funding is 50 per cent of capital costs to a maximum of $75,000 per housing unit to reduce rents to levels affordable to low -income households. (CMHC)

2003-02-27 Alberta announced $8.5 million in new provincial funding which will be matched by a $8.5 million federal contribution under the Canada-Alberta Affordable Housing Agreement. This brings total funding for the initiatives to $17 million for the fiscal year ending March 31, 2003. This amount will also be enhanced through contributions from other partners including municipalities, local community housing authorities, non-profit organizations and private sector companies.” It should be noted that if one unit costs c. 90,000 to build. it costs c.

2002-07 City of Calgary submitted Corporate Affordable Housing Strategy “Implementing a vision for the future… “A range of housing options exist for all ages, income groups, family type.

2002-06-24 The Governments of Canada and Alberta announced the Affordable Housing Program Agreement which provided funding (2002-2007?) to help increase the supply of affordable housing in the province. Federal funding of $67.12 million will be matched by an equal contribution from the province and other partners to facilitate the development of affordable housing in high need areas of the province. It was the sixth affordable housing agreement signed in the past six months and confirmed the Government of Canada’s commitment to housing as a means to support strong and safe communities. “(more) NB. The total cost of one 100-unit apartment complex project was over $4 million.

2002 The citizens of Calgary sent $4.6 billion more in taxes and other payments to Ottawa than they received in various benefits from the federal government (K & L Spatial Economics).

2002 Annual spending on homelessness initiatives in Calgary were c. $72.4 million.

1996-2001 “Provincial/territorial and federal governments have enjoyed an average 25 per cent increase in their revenues from 1996 to 2001. Municipalities have experienced only an average 14 per cent increase in revenues during that period (FCM, 2005).”

2001-11 “Federal, provincial and territorial housing Ministers outlined broad parameters for bilateral Affordable Housing Program Agreements. Federal funding was limited to a maximum of $25,000 per housing unit, to a total nationwide of only $680 million in funding in Phase I for the creation of new rental housing, major renovation and conversion (CMHC).”

2001 “The federal government agreed to a framework agreement with the provinces and territories wherein it would eventually commit $1 billion towards affordable housing over a five-year span. There was no stipulation in the framework agreement around core need. The federal government’s agreement with each province and territory was different, with each province/territory having to commit matching funds of different types (a great deal of the “matching funds” were not cash and did not come directly from the province/territory in question). The entire process is called the Affordable Housing Initiative (AHI). The AHI represented a very different way of financing affordable housing. The minimum affordability stipulation was that each unit had to be at or below average to 20 years). Funded programs under the AHI included home ownership, rental housing, new construction, renovation, urban revitalization,” conversion, new rent supplements, and supportive housing programs(Falvo 2007).”

2001 The provincial and municipal social housing agencies (Calgary Housing Authority and Calhome Properties) merged created the municipally owned and operated Calgary Housing Company (CHC). CHC administers social housing programs (non-seniors) in Calgary through the ownership or management of approximately 7500 housing units. Calgary Housing Company (CHC) is a City of Calgary owned corporation providing safe and affordable housing solutions to citizens of Calgary. CHC operates and manages over 10,000 subsidized and affordable housing units and has a variety of housing options for low-income households including duplexes, townhouses and high-rise apartments. CHC has a reporting relationship to Corporate Properties & Buildings, but functions under its own independent Board of Directors with a mandate to provide affordable housing solutions to Calgarians.

2001 “The Government of Canada provides financial assistance for the supply of new affordable rental housing under the Affordable Housing Program. Then, in November 2001, after almost a decade of withdrawal from assistance for affordable housing, the federal government committed $680 million towards rental housing (to be spent over five years) (Falvo 2007). By the end of 2007-2008, the Federal Government’s investment in this program will total CAD$1 billion, an amount that will be matched by provincial and territorial governments.”

2001 Canada “is one of the one of the more inegalitarian Western nations (that is, there is a wide gap between rich and poor) and ranks near the bottom of the list in an eighteen-country comparison of net social expenditure by the OECD (Adema, 2001, Table 7 cited in (Hulchanski 2005). Hulchanski, David J. 2005-01. “Rethinking Canada’s Housing Affordability Challenge.” Discussion paper. For the Government of Canada’s Canadian Housing Framework Initiative. p. 1

1999 “One of the first signs that the federal government was interested in getting back into affordable housing was the 1999 announcement of the Supporting Communities Partnership Initiative (SCPI) (Falvo 2007).”

1998-11 Mayors of Canada’s largest cities at the caucus of the Federation of Canadian Municipalities (FCM) passed a resolution declaring homelessness a national disaster.

1998 Canada alone “holds the dubious distinction of having received the strongest rebuke ever delivered by the United Nations for inactivity on homelessness and other poverty issues. In 1998, the UN Committee on Economic, Social and Cultural Rights maintained that Canada’s failure to implement policies for the poorest members of the population in the previous 5 years had “exacerbated homelessness among vulnerable groups during a time of strong economic growth and increasing affluence” (p.15). The irony was that this rebuke was given in the midst of Canada having been named for several years in a row as the best country in the world in which to live. Thus, what we are seeing is a disturbing situation where a steadily increasing level of homelessness exists in the very heartland of prosperity and comfort. (Pohl, Rudy. 2001-11. “Homelessness in Canada.)”

The United Nations Committee on Economic, Social and Cultural Rights issued a highly critical and detailed report on the Canada’s social policies in its 1998 review of Canada’s compliance with these rights (United Nations, 1998) particularly about disastrous levels of homelessness (CESCR 1998, paras. 24, 34, 35, 46) and resulting damaging effects, including damage to health (CESCR 1998, paras. 24, 34, 35, 46) and resulting damaging effects, including damage to health (CCPR 1999, para. 12), lack of adequate housing, especially for children and youth (CESCR 1998, para. 35, CRC 1995, para. 17), Aboriginal peoples (CRC 1995, para. 17).

1996 The Calgary economy generated 24% of all new jobs in Canada, even though the city contained less than 3% of the population (k & l consulting, 2003).

1996 CMHC deemed that 20% of Canadian households (1.7 million households) were in core housing need. These households could not
find adequate and suitable housing without spending 30% or more of their pre-tax income. CMHC found that a disturbing 656,000 households (7%) spent at least half of their before-tax income on shelter in 1996, up from 422,000 households, or 5%, in 1991. While accounting for only 35% of all households, almost 70% of those in core need were renters. Much of the analysis, advocacy and action on affordable housing suffers from three flaws, in our view:
• Income levels are taken as given. Too little thought is given to ameliorating the root cause of the affordable housing problem – that there are simply too many low income households in Canada. The focus has primarily been on measures to boost supply, with an emphasis on incentives to increase the overall rental supply – which has only a limited impact at the affordable end of the scale. Many of the measures that have been recommended
as a means of stimulating this new supply (whether expenditure-based or tax-based) are inefficient, which is to say that they entail a high public cost per unit of affordable housing created. TD recommended that governments adjust the design of federal and provincial benefit and tax systems to “make work pay” by reducing the clawback rate for benefits for low-income households. Programs such as the federal-provincial National Child Benefit (NCB) initiative have dealt with the poverty trap to some extent by effectively combining income support with social services. However, the high taxback issue remains. Provincial governments need to step up their efforts and become a leading contributor within the Affordable Housing Framework agreement. There also needs to be more recognition of the fact that municipal governments are currently in no position to live up to their side of the bargain. New responsibilities have been laid at their doorstep in recent years, as a result of provincial and federal downloading and offloading of services. Yet, municipalities have few revenue tools to draw on beyond the slow-growing (and flawed) property tax. As we have stated in all of our reports on Canada’s cities over the past year, municipalities need a more sustainable funding arrangement, which arms them with increased flexibility (TD 2003).

1996 In the city of Calgary, with one of the most acute housing shortages, only 16 new units of rental housing were built in 1996 (more).

1996“The federal government further removed itself from low-income housing supply by transferring responsibility for most existing federal social housing to the provinces (Hulchanski, J. David. 2009. “Homelessness in Canada: Past, Present, Future.”).

1996 “A survey in Calgary found that of the 615 homeless people surveyed on 26 May 1996, 20% were Aboriginals, 3% Asiatics and 3% Blacks (City of Calgary 1996 cited in Library of Parliament 1999).”(17) City of Calgary, Homeless Count in Downtown Calgary, Alberta, Canada, 1996, City of Calgary Community and Social Development Department of Social Research Unit, 1996.

1993 All funds for social housing were cut from the federal budget (Hulchanski, 2002: 8-15; Chisholm, 2003: 5-11). Most provinces, including Alberta, followed suit.

1992 Canada introduced the Home Buyers’ Plan which was the only form of federal assistance for home-buyers. Canadians who meet certain eligibility conditions can withdraw up to C$20,000 tax-free from their Registered Retirement Saving Plans (RRSPs) for house purchase. The money remains tax-exempt if it is repaid within 15 years. Since its inception in 1992, some 1.2 million people have participated in the programme, channelling C$12.0 billion to the housing market.

1984 – 1993 The Canadian Federal Government withdrew from providing housing assistance for low-income Canadians (Sawatsky and Stroick 2005).” This is not surprising given the general trend away from collective state solutions to a social and economic model that relies solely on the “the market” for services including shelter. It also represents a shift away from seeing housing as a home, to seeing housing as an investment. The problem with this approach is that the market will only provide housing to those who can pay for it – in other words, lower- and moderate income people who cannot afford market price for homeownership or, increasingly, for rental housing are priced out of the market. If the gap between the rich and the poor continues to increase as it has since 1980, housing issues will continue to be a concern (2011).” “The co-op and non-profit programs (with their novel “income mix” approach) introduced in 1970s were terminated in 1984 (Falvo 2007).”.

1986 Ottawa Charter for Health Promotion. WHO, Geneva.

1964-1984 The Canadian Federal Government “built 200,000 public housing units and established a variety of housing initiatives, including non-profit and co-op housing programs, as well as a native housing program. This period can be characterized as one with an ‘inclusionary philosophy’ in which the social need for affordable housing in Canada was being addressed (Sawatsky and Stroick 2005).”

1977 Canada did not have a homelessness issue (Hulchanski 2009-02-18).

1949 – 1963 The Canadian Federal Government was not significantly involved in the provision of affordable housing under PM Louis St. Laurent (1948-1957) and PM John Diefenbaker (1957 – 1963). Even with public concern for more social housing, only 12,000 units were built for low-income Canadians (Sawatsky and Stroick 2005).

1949 The Canadian National Housing Act was implemented with amendments.

1945- “After the Second World War, improvements in housing finance, residential land servicing and building techniques, materials, and regulations produced high-quality housing for the vast majority of Canadian households (Hulchanski, Davis J. 2005-01. “Rethinking Canada’s Housing Affordability Challenge.” Discussion paper. For the Government of Canada’s Canadian Housing Framework Initiative. p. 1)”

1938 The Canadian National Housing Act was established but it was not implemented pending amendments.

2011-06-09“Canada’s cities Poor relations: Mayors need more money and more powers.” The Economist. Vancouver.

Selected Webliography and Bibliography

The Economist. 2011-06-09. “Canada’s cities Poor relations: Mayors need more money and more powers.” Vancouver.

Calgary Herald. 2008-06-27. “New project will shelter abused women.”

Evdokimoff, Natasha. 2006-06-22. “Is the Sky the Limit? Finding solutions to Calgary’s affordable housing problem.” Condo Living.

Falvo, Nick. 2007-12. “Alternate Approaches to Addressing the Lack of Affordable Housing in Canada.” Paper presented to Professor George Fallis. Policy Alternatives to Reduce Core Housing Need AS SOSC 4099 3.00 A Directed Reading

Falvo, Nick. 2007-12. “Alternate Approaches to Addressing the Lack of Affordable Housing in Canada.” Presentation for PEF Panel: “Interdisciplinary Approaches to Economic Issues” Canadian Economics Association. Annual Meetings
Dalhousie University. Halifax, Nova Scotia. June 1-3, 2007

The Economist. 2011-06-09. “Canada’s cities Poor relations: Mayors need more money and more powers.” Vancouver.”Downtown Eastside, a ghetto of crime, poverty and drug addiction that is the country’s sickest urban area. Soaring house prices intermingle with homelessness. The middle class is being squeezed out to the suburbs.” “Provincial governments have neglected their responsibility for such matters as social housing, welfare, mental illness, drug addiction and policing. All told, Canada’s big cities need at least C$238 billion ($243 billion) to repair and expand infrastructure, according to the Federation of Canadian Municipalities. But municipal governments lack both money and powers. They get only eight cents out of every tax dollar. Their revenues come mainly from property taxes.” “They have lobbied the federal government to make permanent C$2 billion in annual funding programmes for roads, housing and police set to expire in 2014.” “[R]ural areas continue to be over-represented in the House of Commons. But four out of every five Canadians now live in a city,

Hulchanski, David. J. 2002-12. “Housing Policy for Tomorrow’s Cities.” Discussion Paper F|27. Family Network.

Hulchanski, David J. 2005-01. “Rethinking Canada’s Housing Affordability Challenge.” Discussion paper. For the Government of Canada’s Canadian Housing Framework Initiative. p. 1

Hulchanski, J.D. 2009-02-18. Conference keynote address, “Growing Home: Housing and Homelessness in Canada: Past, Present, Future.” University of Calgary.

Pohl, Rudy. 2001-11. (“Homelessness in Canada.)”

Sawatsky, Janet; Stroick, Sharon M. 2005. “Thresholds for Locating Affordable Housing: Applying the Literature to the Local Context.” City of Calgary.

Vrbanovic, Berry. 2011-06-06. StatementFederation of Canadian Municipalities (FCM).

FCM. 2011-04-06. “FCM Releases Federal Election PLatform: Parties need plan as 40% of municipal funding expires.” Date accessed: June 05, 2012.

Library of Parliament. 1999-01-18. Homelessness.

http://www.fcm.ca/english/View.asp?mp=1&x=1796

http://thechronicleherald.ca/NovaScotia/1246833.html
http://www.cmhc-schl.gc.ca/en/inpr/afhoce/fias/fias_015.cfm
http://www.canada.com/calgaryherald/news/city/story.html?id=b8011963-62c7-4188-af96-5a3394771297
http://www.td.com/economics/special/house03.pdf
http://www.economist.com/node/18805931?story_id=18805931
http://www.condolivingonline.com/calgary/articles/2199/is-the-sky-the-limit
http://www.urbancenter.utoronto.ca/pdfs/elibrary/CPRNHousingPolicy.pdf
http://www.alberta.ca/acn/201105/30331BBB2AC11-97BA-E4A5-8A2958658E2B2395.html
http://www.parl.gc.ca/Content/LOP/ResearchPublications/prb991-e.pdf
http://www.streetlevelconsulting.ca/homepage/homelessnessInCanada_Part1.htm

already pinged
http://www.urbancenter.utoronto.ca/pdfs/elibrary/Hulchanski-Housing-Affd-pap.pdf
http://www.calgary.ca/docgallery/BU/corporateproperties/affordable_housing_strategy.pdf
http://www.calgary.ca/docgallery/bu/cityclerks/council_policies/amcw001.pdf
http://www.calgary.ca/DocGallery/BU/mayor/councils_priorities.pdf
http://www.calgary.ca/docgallery/bu/cns/homelessness/thresholds_locating_affordable_housing.pdf
http://www.calgary.ca/portal/server.pt/gateway/PTARGS_0_0_780_237_0_43/http%3B/content.calgary.ca/CCA/City+Hall/Business+Units/Office+of+Land+Servicing+and+Housing/Affordable+Housing/Affordable+Housing.htm
http://www.fcm.ca/english/View.asp?mp=813&x=814
http://www2.ohchr.org/english/bodies/cedaw/docs/ngos/PHRC_Canada42.pdf
http://snipurl.com/27wya9
http://www.fcm.ca/CMFiles/bcmcfinal1LND-3282008-4938.pdf
http://www.fcm.ca/english/View.asp?mp=1590&x=1719
http://www.fcm.ca/english/View.asp?mp=1590&x=1748
http://www.policyalternatives.ca/publications/commentary/fast-facts-electing-house-canadians-or-not
http://www.socialeconomyhub.ca/sites/default/files/2009_Hulchanski%20_Homelessness%20Past-Present-Future_Conf-%20Keynote-address.pdf
http://www.assembly.ab.ca/ISYS/LADDAR_files%5Cdocs%5Chansards%5Chan%5Clegislature_27%5Csession_4%5C20110511_1330_01_han.pdf
http://www.cba.ca/contents/files/statistics/stat_mortgage_db050_en.pdf
http://whqlibdoc.who.int/hq/1998/WHO_HPR_HEP_98.1.pdf
http://www.cprn.org/documents/50550_EN.pdf
http://www.calgaryhomeless.com/users/folderdata/%7B0AB0E6A0-E12C-46D9-9518-E09324EAD190%7D/Cost_of_Homelessness_-_Four_Cities_March_2005_FINAL.pdf
http://www.westerninvestor.com/index.php/news/55-features/340-sprawl-brawl
http://www.cmhc-schl.gc.ca/odpub/pdf/63390.pdf?lang=en
http://www.budget.gc.ca/2011/glance-apercu/brief-bref-eng.pdf
http://www40.statcan.gc.ca/l01/cst01/gdps02a-eng.htm
http://www.fcm.ca/english/View.asp?mp=1&x=1796
http://www.calgary.ca/docgallery/bu/finance/economics/policy_analysis/fiscal_imbalance_calgary_experience.pdf
http://thechronicleherald.ca/NovaScotia/1246833.html
http://www.condolivingonline.com/calgary/articles/2199/is-the-sky-the-limit
http://www.economist.com/node/18805931?story_id=18805931
http://www.alberta.ca/acn/201103/30091C979B907-A8EA-93E5-957DAB2CC29BF080.html
http://www.td.com/economics/special/house03.pdf
http://www.streethealth.ca/Downloads/NickCEA-0507.pdf

Potentially Useful Links on Affordable Housing

Composition of Homeless Population
HOMELESSNESS IN CANADA
www.calgary.ca/_layouts/cocis/DirectDownload.aspx?target=http%3A%2F%2Fwww.calgary.ca%2FCSPS%2FCNS%2FDocuments%2Fhomelessness%2Fthresholds_locating_affordable_housing.pdf&noredirect=1&sf=1
www.progressive-economics.ca/wp-content/uploads/2007/07/Falvo.pdf
May 2007: Canada’s Lack of Affordable Housing | Canadian Centre for Policy Alternatives
www.urbancenter.utoronto.ca/pdfs/elibrary/CPRNHousingPolicy.pdf
New project will shelter abused women

secondarysuitesSES2007
Calgary Looks Toward Lower-Footprint Future

dt http://www.calgary.ca/docgallery/bu/environmental_management/ecological_footprint/towards_preferred_future.pdf
dt Streetside Development Corporation : Past Projects
dt http://www.colliers-international.com/Calgary/Castleview/Castleview-Park-Apartments.pdfdt karoleena.com/wp-content/uploads/2010/12/graycie_spec_sheets.pdf
dt http://www.griffith.edu.au/__data/assets/pdf_file/0004/81184/city-structures-02-bamford.pdf
dt Jan Gehl lecture on ‘Cities for People’ – Great Public Spaces (Calgary, AB) – Meetup
dt Archived – Budget 2011 (March 22, 2011) – Chapter 4: Supporting Job Creation
dt canada budget 2011 – Google Search
dt http://www.canurb.org/sites/default/files/reports/2010/PUB-2010-RenewCanada-GMiller-PHorgan-05.2010.pdf
dt FFWD – Calgary News & Views – News – Forecast? Cloudy with a chance of lawsuits
dt ginsler.com/sites/ginsler/files/socio047.pdf
dt Affordable Housing Techniques Publication
dt City N. Van – Housing – Affordable Housing Policies
dt ginsler.com/sites/ginsler/files/socio003.pdf
dt IZ Builder Conine
dt remaxottawa.com/dn/LinkClick.aspx?fileticket=DvovulEIwZg%3D&tabid=57&mid=673
dt http://www.oecd-ilibrary.org/docserver/download/fulltext/191100041e1t002.pdf?expires=1306513133&id=id&accname=freeContent&checksum=38E17C457B04B7F4838B0EAEFC3C461D
dt http://www.budget.gc.ca/2011/glance-apercu/brief-bref-eng.pdf
dt 6566024-How-Should-Housing-Densities-Be-Determined-a-Comparative-Analysis-of-Brisbane-and-en
dt Cities for People – Google Booksdt Projects Map – Canada’s Economic Action Plan
dt Affordable Housing Money Counts – Google Docsdt
“calgary homeless foundation” “societal costs of homelessness” 2004 – Google Search
dt $140 square foot to build a housing unit calgary? – Google Searchdt 2011 November 21 « Decisions, Decisions, Decisionsdt 4 million to build 36 unit multi-family complex? – Google Searchdt A leg up for Britain’s generation rent – World – Macleans.cadt A practical framework for expanding affordable housing services in Australia: learning from experience | Australian Policy Onlinedt A Tale of Two Town Houses – Magazine – The Atlanticdt Affordable Housing – CPD – HUDdt affordable housing – Google Scholardt affordable housing – Google Searchdt Affordable Housing | CMHCdt Affordable Housing and Homelessnessdt Affordable housing debate heats up amid cutbacks – The Whig Standard – Ontario, CAdt Affordable Housing Initiative | CMHCdt Affordable Housing Institutedt Affordable Housing Institutedt Africa’s infrastructure: A road to somewhere | The Economistdt AHI: United States » OECD bubbles? LMNO bubbles! OSAR GSE M? Part 5, regulate rents, but not too muchdt Alberta budget promises record $33B in spending – Business – CBC Newsdt Amazon.com: Affordable Housing and Public Policy: Strategies for Metropolitan Chicago (A Chicago Assembly Book) (9780962675522): Lawrence B. Joseph: Booksdt Analysis of Urban Growth and Sprawl … – Basudeb Bhatta – Google Booksdt Analysis of Urban Growth and Sprawl … – Basudeb Bhatta – Google Booksdt Analysis of Urban Growth and Sprawl from Remote Sensing Datadt Australia’s affordable housing crisis: the price of poor public policy – On Line Opinion – 20/10/2003dt Backgrounder: 2010/2011 Housing Capital Initiatives Projects – Canada’s Economic Action Plandt BBC News – ‘Housing shortage crisis’ predicted in IPPR reportdt BBC News – Housing: David Cameron vows to ‘get Britain building’dt BBC News – Ken Livingstone pledges ‘London Living Rent’ systemdt Big cities back a pennydt Bronconnier floats idea of legalizing basement suites – Calgary – CBC Newsdt Building and Construction Canada – Spring 2010 [20 - 21]dt calgary multi-family 3 storey complex 36 units construction costs? – Google Searchdt Calgary Philharmonic Orchestra singing Tweets goes viraldt canada cost of homelessness – Google Scholardt canada’s economic action plan social housing – Google Searchdt Canadian Homelessness Research Networkdt Canadian Political and Economic Newsdt CARH – 2012 Mid-Year Meeting Brochure/Agendadt CBC: The fifth estate – No Way Home, The Cost of Homelessnessdt CBI: CBI comments on prime minister’s speech to CBI Annual Conferencedt Chartered Institute of Housing – Search Resultsdt Chris Tilly’s Research : Center for Industrial Competitiveness : UMass Lowelldt City Mayors: Affordable housing – USAdt CMHC :: INSURED FINANCINGdt Concerns raised with Calgary alderman over Eau Claire condo land dealdt Congress for the New Urbanismdt CUCS – David Hulchanski – Housing Policy for Tomorrow’s Cities (Report)
dt CUCS – J. David Hulchanskidt Dab_solver – affordable housing
dt Definition of general housing terms – Housing – Department for Communities and Local Government
dt Delivering Affordable Housing – Housing – Department for Communities and Local Government
dt Divided We Stand – Books – OECD iLibrary
dt Divided We Stand | OECD Free Preview | Powered by Keepeek Digital Asset Management | http://www.keepeek.comdt Divided we Stand: Why Inequality Keeps Rising
dt Do Rising Tides Lift All Prices? Income Inequality and Housing Affordability
dt Does Affordable Housing Detrimentally Affect Property Values? A Review of the Literature
dt Downtown land deal to go under microscope – Calgary – CBC Newsdt Economic inequality – Wikipedia, the free encyclopedia
dt Economics focus: House of horrors, part 2 | The Economist
dt FAST FACTS: “housing” that will lead to a need for more social housing | Canadian Centre for Policy Alternativesdt FCM – Housing
dt Five economic tests for the majority government | Canadian Centre for Policy Alternativesdt From Need to Affordability: An Analysis of UK Housing Objectives
dt From Need to Affordability: An Analysis of UK Housing Objectivesdt From Need to Affordability: An Analysis of UK Housing Objectives
dt Global house prices: Castles made of sand | The Economistdt Government program boosts Brazil housing market | Reuters
dt health and homelessness (PRB99-1E)
dt Help:Footnotes – Wikipedia, the free encyclopediadt Home – gltn
dt Homelessness
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An article in (The Economist 2010-11-25) noted that Canada had survived the global financial crisis better than many other developed countries: Canadian banks and public finances are sound, and the economy recovered quickly and strongly from recession.” However, in the same article it was noted that “Canada ranks 22nd-worst out of the 31 countries in the OECD, in terms of child poverty. More than 3m Canadians (or one in ten) are poor; and 610,000 of them are children. (The Economist 2010-11-25).” This timeline of selected events related to child poverty in Canada attempts to trace the social history and compile reliable references on the successes and failures, progress and stagnation on the path to the eradication of child poverty in Canada.

Reverse chronological order

2012 The Innocenti Report uses Statistics Canada ‘s Survey on Labour and Income Dynamics (SLID), 2009 for the 2012 report.

“Survey on Labour and Income Dynamics (SLID) is a panel survey run by Statistics Canada. It is the country’s primary source for income data, and includes
information on family situation, education and demographic background. The survey is representative of all individuals living in Canada, excluding residents of
the Yukon, the Northwest Territories and Nunavut, as well as residents of institutions and persons living on Indian reserves. Overall, these exclusions amount to less
than 3% of Canada’s population. Report Card 10 uses data from the 2009 round of the SLID, with income poverty data referring to the year 2008. More information can be found at: http://www.statcan.gc.ca

2011

2011-11-24 Dream No Little Dreams Conference” co-hosted by the YWCA of Calgary and the Action to End Poverty in Alberta initiative, organized to build momentum for coordinated action to end poverty in Alberta held in Calgary, AB. This conference focuses on strategic action to create a provincial poverty reduction strategy in Alberta. See also (CBC. As child poverty spikes, conference aims for solutions.”

2011-11 Public Interest Alberta, the Alberta College of Social Workers, and the Edmonton Social Planning Council published their report entitled “In This Together: Ending Poverty in Alberta.” The publication contributes to the ongoingCampaign 2000 project.

2011-11-23. Armine Yalnizyan of Policy Alternatives published the report entitled “Twenty Years of Campaign 2000 – What Now?

YWCA. 2011-03. “Educated, Employed and Equal” the Economic Prosperity Case for National Child Care.”

2010-11 Canada survived the global financial crisis better than many other developed countries: Canadian banks and public finances are sound, and the economy recovered quickly and strongly from recession (The Economist 2010-11-25).”

2010

1990-2010 Canada has enjoyed long periods of steady growth (The Economist 2010-11-25).

2010-11 Canada ranks 22nd-worst out of the 31 countries in the OECD, in terms of child poverty. More than 3m Canadians (or one in ten) are poor; and 610,000 of them are children (The Economist 2010-11-25).

2010-11 Campaign 2000 reported that child poverty is now as bad as it was in 1990 (The Economist 2010-11-25).

2010-11 Food Banks Canada reported that 900,000 Canadians rely on food handouts, up by 9% on last year (The Economist 2010-11-25).

2010 Canada has about 300,000 homeless people (The Economist 2010-11-25).

2010 British Columbia, one of the richest Canadian provinces has one of the highest rates of child poverty (10.4%) after taxes on family income.

2010 Some Canadian provincial governments, including those of populous Ontario and Quebec, have launched poverty-reduction programmes; many include attempts to prod or help people back into work (The Economist 2010-11-25).

2010 Newfoundland financed poverty eradication programs through its royalties from oil and mining and successfully has cut its poverty rate in half (to 6.5%) (The Economist 2010-11-25).

2010 The only strategy acceptable to Stephen Harper’s Conservative administration to respond to poverty is “the sustained employment of Canadians”. (The Economist 2010-11-25).

2009

2009-12 The Subcommittee on Cities, The Standing Senate Committee on Social Affairs, Science and Technology published a report entitled “In From the Margins: a Call to Action on Poverty, Housing and Homelessness.” described as “an excellent roadmap for poverty reduction.” One of the 72 recommendations towards the eradication of child poverty was to increase the National Child Benefit to reach $5,000 by 2012 [Recommendation 34].

“Through a myriad of expert witnesses, site visits, roundtables and most importantly, testimony from those living in poverty and homelessness, we are saddened to report that far too many Canadians living in cities live below any measure of the poverty line; that too many people struggle to find and maintain affordable housing; and that an increasing number of Canadians are homeless. And despite the thoughtful efforts and many promising practices of governments‘, the private sector, and community organizations, that are helping many Canadians, the system that is intended to lift people out of poverty is substantially broken, often entraps people in poverty, and needs an overhaul . . . [We] believe that eradicating poverty and homelessness is not only the humane and decent priority of a civilized democracy, but absolutely essential to a productive and expanding economy benefitting from the strengths and abilities of all its people. (Standing Senate Committee on Social Affairs, Science and Technology. 2009-12. “In From the Margins: a Call to Action on Poverty, Housing and Homelessness.” ).”

2009 According to the most recent data available in 2011, in Alberta there was a dramatic spike in child and family poverty. The “Alberta child poverty rate was 9.3% using LICO, compared to 12.8% using LIM. . . . (In This Together: Ending Poverty in Alberta.”

2009 The number of Alberta children living in poverty rose from 53,000 in 2008 to 73,000 in 2009 (CBC 2011-11-24 citing (In This Together: Ending Poverty in Alberta).

2009 “Disparities between families are growing. Between 1989 and 2009, after accounting for inflation, the yearly income of the poorest 10% of Alberta families with children increased by only $4,682. The yearly income of the richest 10% of families with children went
up $156,403. Average yearly family incomes went up $35,088 (In This Together: Ending Poverty in Alberta.”

2009 “In Alberta, the effectiveness of government income transfers in lifting children above the poverty line has increased over the years. In 1989, only about 25% of children were lifted above the poverty line. By 2009, this had increased to 44%. . . [However] In 2009, the Ontario government doubled the Ontario Child Benefit to $1100 per child, with a scheduled increase to $1310 by 2013.23 The Alberta government’s stronger financial position should allow it to introduce an Alberta Child Benefit at least equal to Ontario’s (In This Together: Ending Poverty in Alberta.”

2008

2008 When Canada entered the brutal recession there were c. 3 million Canadians living in poverty using the standard measure, Statistic Canada’s after-tax low-income cut-off (LICO) (Yalnizyan 2010-06-21).

2008 Witnesses at the senate inquiry on poverty, described challenges of raising children in poverty, and of increasing earnings in the labour market without affordable care for children that also contributes to their development and preparation for school (Yalnizian, Browne, Battle, Issue 4, 28 February 2008). The same witnesses emphasized that a small universal contribution to families with young children, like the current Universal Child Care benefit, was not sufficient to purchase childcare (GC 2008-06-08).

2007

2007 The child poverty rate in Canada was still 11.7%. Canada experienced a 50% real increase in the size of its economy from 1989 to 2007.

2007-06-14 Michèle Thibodeau-DeGuire, President and Executive Director, United Way of Greater Montreal, Evidence, SAST, 1st Session, 39th Parliament, 14 June 2007: “If people cannot have affordable housing, they will be in a horrible mess. Most of their money will go toward rent. They cannot feed themselves properly. How will they be able to help their children through school with the stress they live with?”

2007-11-26 Campaign 2000 released their national annual report card on poverty in Canada entitled “It Takes a Nation to Raise a Generation: 2007 Report Card on Child & Family Poverty in Canada.” Despite a growing economy, soaring dollar and low employment, 788,000 children (1/8 of Canadian children) live in poverty. Ontario remains the “child poverty capital,” with 345,000 children living in impoverished conditions.”

2007-11-26 Almost 30 per cent of Toronto families – approximately 93,000 households raising children – live in poverty, compared with 16 per cent in 1990. [The Mercer annual Cost of Living Survey of 143 major cities around the world measures the comparative cost of over 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment. In 2006, Toronto was ranked as the most expensive city in Canada, just slightly ahead of Vancouver.] Since 2000, the city has seen a net loss of jobs, many of them well-paying and unionized, while elsewhere job creation is on the rise. At the same time jobs have been replaced by temporary, part-time and contract work that offer no job security, benefits or eligibility for employment insurance. As a result, an alarming number of households are in deep financial trouble as seen by an increase in the number of evictions, family debt and bankruptcies since 2000, a year when the crippling recession of the 1990s had clearly eased in the rest of the country, the report says. From 1999 to 2006, landlord applications for eviction due to nonpayment of rent climbed from 19,795 to more than 25,000. Also, the number of people receiving credit counselling in Toronto has almost doubled in the past six years to an average of 4,534 per month. Not surprisingly, the number of moneylending outlets has increased almost eightfold since 1995 to more than 300, largely concentrated in the low-income neighbourhoods. United Way of Greater Toronto. 2007. Losing Ground: The Persistent Growth of Family Poverty in Canada’s Largest City, (Monsebraaten and Daly 2007-11-26 ).

2007-05-09 The former Ontario premier Bob Rae was one of four panellists at at the Toronto Star-sponsored forum on the growing income gap held at the St. Lawrence Centre and attended by 250. Rae argued that, “We now have to restore and renew our commitment to help people in difficult times [to invest] in affordable housing, child care and education” [. . .] Rae noted that Canada is the only government in the Organization for Economic Co-operation and Development that doesn’t have a national housing policy, and that’s reflected in the country’s poverty figures. Economist Yalnizyan, research director of the Toronto Social Planning Council remarked that “Income inequality is the second inconvenient truth in our society. [G]overnments need to act now – not only to tackle poverty, but to ensure everyone is benefiting from a healthy economy (Monsebraaten and Daly 2007).” Stop picking away at the edges of poverty, say forum speakers, and take a leaf from Ireland’s comprehensive plan.

2007-05 A study by economist Yalnizyan was released by the Canadian Centre for Policy Alternatives, showing a widening income gap in Ontario. “40 per cent of Ontario families have seen no gain in real income – and often a loss – compared with their predecessors 30 years ago. The richest 10 per cent, meanwhile, have seen their incomes soar. And even though Ontario parents are better educated, they spend more time working than the previous generation did, the study says (Monsebraaten and Daly 2007).”

2007-04 Ontario’s provincial budget “put poverty reduction on the agenda with a new Ontario child benefit for all children in low-income families – not just those on welfare. And it outlined a plan for raising the minimum wage to $10.25 by 2010, from $8 today (Monsebraaten and Daly 2007).”

2007-03 The Ontario Child Benefit, announced in the March 2007 Ontario Budget, pledged $2.1 billion over the first five years to help low-income families support their children (UWGT 2007:73).

2007 The federal government introduced a non-refundable child tax credit which provides income tax savings of up to $300 for children of all ages to tax-paying parents (Senate of Canada 2008-06-08).

2007 In 2007 Report Card on Child Well-being in Rich Countries: The most comprehensive assessment to date of the lives and well-being of children and adolescents in the economically advanced nations. builds and expands upon the analyses of Report Card No. 6 which considered relative income poverty affecting children and policies to mitigate it. Report Card 7 provides a pioneering, comprehensive picture of child well being through the consideration of six dimensions: material well-being, health and safety, education, family and peer relationships, subjective well-being, behaviours and lifestyles informed by the Convention on the rights of the child and relevant academic literature.” UNICEF. 2007. “Report Card on Child Well-being in Rich Countries.”

2007-11-12 Ligaya, Armina. 2007. “The debate over Canada’s poverty line.” CBC News On-line. http://www.cbc.ca/news/background/economy/poverty-line.html November 12. “[C]hild poverty numbers have not budged at all since 1989 when Canadian parliamentarians stood up and promised to do their best to eradicate it within a decade. Even today, 11.7 per cent of children under 18 are living below the low-income cut-off line.” There are now record numbers of tenants being evicted from their homes and a rising dependency on food banks (Shapcott cited in Ligaya 2007).

2007 “Jean Swanson, co-ordinator of the Carnegie Centre Action project in the heart of Vancouver’s Downtown Eastside, said restricting access to employment insurance and welfare only punishes the poor. The poverty activist said she has watched Canada’s homeless epidemic multiply what she says is 10-fold over the last decade (Ligaya 2007).”

2006

2006 Newfoundland announced a strategy to become the province with the lowest poverty rate by 2016.

2006 20,900 Canadian children used food banks, double the number in 1989.

2006 The Universal Child Care Benefit (UCCB) was added, with payments of monthly instalments of $100 for every child under the age of 6 (regardless of parental income) (Senate of Canada 2008-06-08).

2006 The net worth of the lowest quintile fell to a negative net worth from zero while national net worth grew 2.8% in the last quarter of 2006. Less than 10% of families who hold at least 53% of total Cdn. net worth ($4.8 trillion) (Drummond and Tulk, 2006).

2006-11-24 CBC news summarized details from the Campaign 2000 (2006) National Annual Report on Child Poverty with the headlines “Aboriginal children are poorest in country: report: B.C. and Newfoundland have highest rates; Alberta and P.E.I. have lowest rates.” November 24, 2006. One aboriginal child in eight is disabled, double the rate of all children in Canada; Among First Nations children, 43 per cent lack basic dental care; Overcrowding among First Nations families is double the rate of that for all Canadian families; Mould contaminates almost half of all First Nations households; Almost half of aboriginal children under 15 years old residing in urban areas live with a single parent; Close to 100 First Nations communities must boil their water; Of all off-reserve aboriginal children, 40 per cent live in poverty.

2005

1999-2005 Considerable wealth was accumulated in Canada between 1999 and 2005. In 2005 net worth increased by 41.7% to nearly $1.5 trillion (US?). The most recent Statistics Canada report revealed today that the Canadian national net worth reached $4.8 trillion by the end of the third quarter. While in terms of an economist’s algorithm this translates into an average of $146,700 per person. In reality only the a tiny number of Canadian households benefited. “The gain in net worth resulted from an increase in national wealth (economy-wide non-financial assets) as well as a sharp drop in net foreign debt. National net worth grew 2.8% in the third quarter, the largest increase in more than two years (Statistics Canada 2006)”.

2005 According to Stats Canada the disparity between the top income-earning category and the lowest was $105,400 (Shapcott cited in Ligaya 2007). Statistics Canada income figures showed 788,000 children were living in poverty in 2005, a rate of 11.7 per cent.

2005 41 per cent of all low-income children lived in families in Canada where at least one parent had a full-time job (Campion-Smith 2007).

2004

2004 Childhood  poverty in the United States is among the highest in the developed world (Rifkin ED 2004: x).”

2004 Since 2004, the 25 countries of the European Union (EU) have been developing a new statistical data source, known as Community Statistics on Income and Living Conditions (EU-SILC). EU-SILC aims to become the reference source of comparative statistics on income distribution and living conditions within the EU. A primary purpose of EU-SILC is to monitor the common indicators (the so-called Laeken Indicators) by which the EU has agreed to measure its progress towards reducing poverty and social exclusion. EU-SILC therefore replaces the European Community Household Panel (ECHP) which was the main source of such data from 1994 until 2001 (for the then 15 Member States of the EU). Designed to fill some of the acknowledged gaps and weaknesses of the ECHP, EU-SILC collects every year comparable and up-to-date cross-sectional data on income, poverty, social exclusion and other aspects of living conditions – as well as longitudinal data on income and on a limited set of non-monetary indicators of social exclusion. The first EU-SILC data for all 25 Member States of the current EU, plus Norway and Iceland, should be available by the end of 2006. The first 4-year longitudinal data on ‘those at-persistent-risk-of-poverty’ will be available by the beginning of 2010. In addition to populating these core indicators, each round of EU-SILC also gathers data on one particular theme – beginning in 2005 with data on the intergenerational transmission of poverty.

2002

2002 Quebec introduced anti-poverty legislation. The “Province of Quebec and Ireland have tackled poverty head on, with impressive results that show poverty reduction can be achieved against planned goals (UWGT 2007:73).”

2002 Of all the world’s wealthy nations it was only in the United States that the majority (58%) claimed that cared more about personal freedom to pursue goals without government interference than play an active role in society so as to guarantee that nobody is in need? (Rifkin ED 2004:379) .”

2001

2001 Over 653,000 Canadians were earning wages that classified them as “working poor” (and 1.5 million people were directly affected, one third of them children under the age of 18) (Senate of Canada 2008-06-08).

2001-05 The National Council on Welfare using the LICO claimed that 5 million Canadians are living in poverty.

2000s

2000-12 Laurel Rothman, the National Coordinator of Campaign 2000 wrote a Letter to the Editor entitled “Richer, poorer” to the National Post in response to their editorial dismissing Campaign 2000′s annual report card (Rothman 2000).

2000-12-06 A letter entitled “No surplus for kids” by Pedro Barata, the Ontario Coordinator of Campaign 2000, was published in the Toronto Star. Barata asked, “Why is it that Ontario was one of only two provinces where since 1996 poor families fell deeper below the poverty line?” or, “Why does Ontario have the highest monthly fees for child care in Canada?”

2000-06-01 Innocenti Report Card. Issue No. 1. The first Innocenti Report Card presents the most comprehensive analysis to date of child poverty in the nations of the Organisation for Economic Co-operation and Development (OECD). “Whether measured by relative or absolute poverty, the top six places in the child poverty league are occupied by the same six nations – all of which combine a high degree of economic development with a reasonable degree of equity” In the league table of relative child poverty, the bottom seven places are occupied by the Canada (15.5%), Ireland (16.8%), Turkey, United Kingdom, Italy, the United States (22.4%), and Mexico (26.2%). In the league table of absolute child poverty, the bottom four places are occupied by Spain, the Czech Republic, Hungary, and Poland.” “The countries with the lowest child poverty rates allocate the highest proportions of GNP to social expenditures (Figure 8). Differences in tax and social expenditure policies mean that some nations reduce ‘market child poverty’ by as much as 20 percentage points and others by as little as 5 percentage points (Figure 9).”

2000-12-05 The editorial in the Toronto Star dealt with child poverty in Canada.

2000-11-24 The National Post published an editorial dismissing Campaign 2000′s Annual National Report Card on Child Poverty in Canada (Rothman 2000).

2000 Almost 1 in 5 children still living in poverty in Ontario.

2000 “In the absence of an official poverty line in Canada, Campaign 2000 ascribes to the position held by most Canadian social policy organizations studying the issue and by UNICEF. UNICEF uses a relative measure of poverty to describe those whose material, cultural and social resources are so limited as to exclude them from the minimum acceptable way of life where they live (Rothman 2000).”

2000 Table 1. shows the percentage of children living in ‘relative’ poverty, defined as households with income below 50 per cent of the national median. Using this standard of relative poverty countries at the bottom of the list included Canada (15.5%), Ireland (16.8%), Turkey, UK, Italy, USA (22.4), Mexico (26.2%), . Innocenti Report Card. Issue No. 1. (UNICEF 2000)

1990s

1990s “The recession of the 1990s generated a much bigger escalation of poverty [than the 1980s], both in magnitude and duration, because a protracted period of job loss ran into the scaling back of unemployment insurance and social assistance by federal and provincial governments [tough-love approaches] (Yalnizyan 2010-06-21).”

1990s “The growth in the number of low-income families in the City of Toronto in the 1990s was alarming, soaring from 41,670 at the start of the 1990s to 84,750 by the decade’s end. The factors that contributed to this change are well known – the deep recession in the early 1990s, corporate downsizing, the rise in precarious employment, decreased access to Employment Insurance, reduced welfare payments, and the barriers that skilled immigrants faced finding work for which they were qualified (UWGT 2007:40).”

1998 The National Child Benefit Supplement was added to the CCTB to provide increased benefits to all low-income families including those without taxable income.

1997 Senator Ermine Cohen wrote a report on child poverty in Canada, entitled “Sounding the Alarm: Poverty in Canada.”8 “It was intended to ―revisit the commitments made in the 1971 Croll Report and to evaluate progress a quarter-century later. Her report provided useful snapshots of poverty experienced by those who were working and those who were not, among over-represented groups including Aboriginal peoples, people with disabilities, youth and seniors. She considered the role of the labour market, our international obligations, and more themes that emerged again in our study. Harshly critical of our ―tax and transfer‖ system, the report called for changes, as did the Croll report before it. Too few have been implemented SSCSAST 2009-12. p. 24).”

1996 The number of Canadians living under the low-income cut-off after taxes was 11.6 per cent in 1980, according to Statistics Canada, far lower than the 1996 peak of 15.7 per cent (Yalnizyan cited in Ligaya 2007).

1995-2005 The national Irish government set firm targets, created timetables and reported annually so the public could easily see progress being made against poverty. In this way they reduced poverty from 15 per cent to 6.8 per cent (Yalnizyan in Monsebraaten and Daly 2007).

1995 The World Summit for Social Development was held in Copenhagen. The Copenhagen Declaration and Programme of Action was adopted. The Copenhagen stressed the urgent need for countries to deal with social problems such as poverty, unemployment and social exclusion (Symonides 1998). This was the largest gathering ever of world leaders. The declarations, programmes included a pledge to put people at the centre of development, to conquer poverty, to ensure full employment, to foster social integration (Development 1995).

1992 United Nations Conference on Environment and Development was held in Rio de Janeiro. “At this conference it was recognized that extreme poverty and social exclusion of vulnerable groups persisted and inequalities had become increasingly dramatic in spite of economic development. At this conference the term sustainable development referred to “economic development, social development and environmental protection as interdependent and mutually reinforcing components (Symonides 1998:3).”

1991 Canada experienced a transformational recession for the labour market and began emerging from that only in 1997 (Yalnizyan cited in Ligaya 2007).

1980s

1989-11-24 The child poverty rate in Canada was 11.7%. On November 24, 1989, the House of Commons unanimously passed a resolution to seek to achieve “the goal of eliminating poverty among Canadian children by the year 2000 (Campaign 2000 ).”

1989 The Canadian Parliament unanimously supported a resolution to eliminate child poverty by 2000.

1988 The UNICEF Innocenti Research Centre, located in Florence, Italy, was established in 1988 to strengthen the research capability of the United Nations Children’s Fund and to amplify its voice as an advocate for children worldwide.

1980s and 1990s Single mothers, disabled people, aboriginal Canadians and immigrants suffered cuts in welfare payments (which are too meagre to keep someone above the country’s de facto poverty line) when governments, both federal and provincial, cut public spending to restore fiscal health (The Economist 2010-11-25).

1981-82 Canada experienced a transformational recession for the labour market and it took the country about eight years to climb out of the rut (Yalnizyan cited in Ligaya 2007).

1980 The number of Canadians living under the low-income cut-off after taxes was 11.6 per cent in 1980, according to Statistics Canada, far lower than the 1996 peak of 15.7 per cent (Yalnizyan cited in Ligaya 2007). “In 1980, the disparity between the top income-earning category and the lowest was $83,000, according to Statistics Canada. By 2005, that gap had reached $105,400 (Shapcott cited in Ligaya 2007).”

1970s

1971Senator David Arnold Croll, PC, QC published his influential “Report of the Special Senate Committee on Poverty” (Croll Report) which began with the words “the poor do not choose poverty. It is at once their affliction and our national shame. The children of the poor (and there are many) are the most helpless victims of all, and find even less hope in a society where welfare systems from the very beginning destroys their chances of a better life.” The report moved the Trudeau government to triple family allowances in 1973 and institute the Child Tax Credit in 1978. Aside from his work on poverty, he was also responsible for Senate reports on aging. In 1990 in recognition of his contributions, he was sworn into the Queen’s Privy Council for Canada, an honour usually given only to federal cabinet ministers.

1950s

1950 [In 2000] despite a doubling and redoubling of national incomes in most nations since 1950, a significant percentage of their children are still living in families so materially poor that normal health and growth are at risk. And as the tables show, a far larger proportion remain in the twilight world of relative poverty; their physical needs may be minimally catered for, but they are painfully excluded from the activities and advantages that are considered normal by their peers (UNICEF. 2001. Innocenti Report Card. Issue No. 1.).”

Note: In 2011 Canada still does not have an official poverty line although most data on poverty is presented using the uniquely Canadian Low Income Cut-off (LICO) After-Tax Measure, which is based on a complex calculation.1. The major weakness of LICO as a measurement tool is partly that since 1992, LICO has only been updated for inflation and not other changes in the expenditure pattern of Canadian families. Statistics Canada has no plans to update LICO (In This Together: Ending Poverty in Alberta. Campaign 2000 is considering transitioning from LICO to the Low Income Measure (LIM) (After-Tax) starting in 2012. LIM, is based on 50% of median family income, is a more easily understood measure. LIM is updated every year. LIM is used internationally while LICO is only used in Canada. As shown on Chart 1, in their report, “in the 1990s LICO poverty rates were higher than LIM rates. In the 2000s LICO rates have been consistently lower. In 2009, the Alberta child poverty rate was 9.3% using LICO, compared to 12.8% using LIM (In This Together: Ending Poverty in Alberta.”

Bibliography and Webliography

Battle, Ken. 2008-01. “A Bigger and Better Child Benefit: A $5,000 Canada Child Tax Benefit.” Caledon Institute. Ottawa, ON p.3.

The Standing Senate Committee on Social Affairs, Science and Technology. 2009-12. “In From the Margins: a Call to Action on Poverty, Housing and Homelessness.” Subcommittee on Cities. Ottawa, ON: Government of Canada.

The Standing Senate Committee on Social Affairs, Science and Technology. 2008-06. “Poverty, Housing and Homelessness: Issues and Options.” Subcommittee on Cities. Ottawa, ON: Government of Canada.

Public Interest Alberta, the Alberta College of Social Workers, and the Edmonton Social Planning Council. 2011-11. “In This Together: Ending Poverty in Alberta.” Edmonton, AB. ISBN 978-0-921417-60-6.

Atkinson, A. B. Macroeconomics and the Social Dimension.

Barata, Pedro. 2000-12-06. “No surplus for kids.” Letter of the Day. Toronto Star.

Bradshaw, J. and Mayhew, E. (eds.) 2005. The well-being of children in the UK, Save the Children. London.

Campaign 2000. 2006. “Oh Canada! Too Many Children in Poverty for Too Long.”

Campaign 2000. 2007. “It Takes a Nation to Raise a Generation: 2007 Report Card on Child & Family Poverty in Canada.”

Campion-Smith, Bruce. 2007. “Ontario leads in child poverty.” Feature on Poverty. Toronto Star. November 26.

CBC. 2006. “Aboriginal children are poorest in country: report: B.C. and Newfoundland have highest rates; Alberta and P.E.I. have lowest rates.” November 24, 2006.

CBC. 2007. “Child poverty rates unchanged in nearly 2 decades: report.” November 26.

CBC. 2011-11-24. “As child poverty spikes, conference aims for solutions.”

Drummond, Don & Tulk, David (2006) Lifestyles of the Rich and Unequal: an Investigation into Wealth Inequality in Canada. TD Bank Financial Group.

The Economist. 2010-11. “The persistence of poverty amid plenty.” The Economist.

Ligaya, Armina. 2007. “The debate over Canada’s poverty line.” CBC News On-line. November 12.

Marlier, E.; Atkinson, A.B.; Cantillon, B.; Nolan,B. 2006. The EU and social inclusion: Facing the challenges. Policy Press: Bristol.

Mcquaig, Linda. 1995. Shooting the Hippo: Death by Deficit and Other Canadian Myths. Toronto, Viking.

Mcquaig, Linda. 1998. The Cult of Impotence: Selling the Myth of Powerlessness in the Global Economy. Toronto, Penguin Books.

McMahon. Fred. 2000. “The true measure of poverty.” Op-Ed. Peterborough Examiner on ?

Monsebraaten, Laurie; Daly, Rita. 2007. “In search of a poverty strategy.” Toronto Star. May 09.

Monsebraaten, Laurie; Daly, Rita. 2007. “Toronto families slip into poverty.” Toronto Star. November 26.

Richards, John. Reducing Poverty: What has worked, and what should come next.

Rifkin, Jeremy P. 2004. The European Dream: How Europe’s Vision of the Future is Quietly Eclipsing the American Dream. Jeremy P. Tarcher, ISBN 1-58542-345-9

Rothman, Laurel. 2000. “Richer, poorer.” Letter to the Editor. National Post. Toronto. December.

Rothman, Laurel; Shillington, Richard. 2000. “A place for every child: building an inclusive society.” Peterborough Examiner. December 7.

Statistics Canada. 2006. “National balance sheet accounts: Third Quarter”. Press Release. Ottawa, ON. December 15, 2006.

UNICEF. 2001. Innocenti Report Card. Issue No. 1.

UNICEF. 2007. “Child poverty in perspective: An overview of child well-being in rich countries: The most comprehensive assessment to date of the lives and well-being of children and adolescents in the economically advanced nations.” Innocenti Report Card 7, 2007. UNICEF Innocenti Research Centre, Florence.

United Way of Greater Toronto. 2007. Losing Ground: The Persistent Growth of Family Poverty in Canada’s Largest City.

Yalnizyan, Armine. 2010. “Canada’s Poverty Hole: New income data suggests troubling poverty trends are unfolding in Canada.” National Office. June 21, 2010

YWCA. 2011-03. “Educated, Employed and Equal” the Economic Prosperity Case for National Child Care.”


In the 199os an artist-musician and close friend originally from Haiti, Emmanuel Printemps, used to visit us regularly on Friday evenings and we would ask him to share his music with us and our other guests. We always requested one of his most moving, enchanting Creole songs, the powerful but sad story of the local butcher who lost his livelihood during the pig slaughter. As I follow the events in Haiti since the earthquake, I think of these precious friends from another time and place; they and their families are in our hearts and prayers.

Rural peasants in Haiti raised a very hardy breed of creole pigs which along with goats, chickens, and cattle served as a savings account. It was argued that from 1978 to 1982 about 1/3 of Haiti’s pigs became infected with the highly contagious African Swine Fever (ASF) in an epidemic that had spread along the Artibonite River shared with the Dominican Republic whose pigs had caught the virus from European sources. At first peasants were encouraged to slaughter their own pigs but then the Haitian government proceeded on a total eradication program that virtually wiped out what remained of the 1.2-million pig population by 1982. Farmers argued that they were not adequately compensated for their losses. The more robust creole pigs were replaced with a sentinel breed of U. S. pigs that were not adapted to Haiti’s ecosystem or market. For Haiti’s rural peasants the loss of income due to the virus and the government’s controversial eradication and repopulation programs led to further impoverishment and greater hardship, ultimately resulting in greater political instability.

View

In two webviral posts entitled “The Hate and the Quake: Rebuilding Haiti” by scholar, historian Sir Hilary Beckles of the University of the West Indies, (Beckles 2010-01-19) that are now circling the globe , we need to do some memory work before we conclude that Haitians are the architects of their own impoverishment.

In this seminal retelling of Haiti’s history,  (Beckles 2010-01-19) reminds us all that when Haiti provided freedom and the right of citizenship to any person of African descent who arrived on the shores of the newly formed Haitian republic (1805), the newly formed nation-state (1804) was strategically punished by Western countries, through economic isolation ( (Beckles 2010-01-19)).

From 1805 through 1825 Haiti was completely denied access to world trade, finance, and institutional development in “the most vicious example of national strangulation recorded in modern history ( (Beckles 2010-01-19)).”

In 1825 in an attempt to be a part of international markets, Haiti entered into negotiations with France which resulted in payment of a reparation fee of 150 million gold francs to be paid to France in return for national recognition. The installments were made from 1825 until 1922. From 1825-1900 alone this amounted to 70% of Haiti’s foreign exchange earnings. Beckles (2010-01-) argues that this merciless exploitation caused the Haitian economy to collapse  (Beckles 2010-01-19).

Furthermore, when Haiti’s coffee or sugar yields declined, the Haitian government had to borrow money from the United States at double the going interest rate in order to repay their punishing debt to the French government (Beckles 2010-01-19) .

From 1915-1934 the United States occupied Haiti under orders of President Woodrow Wilson in response to concerns that Haiti was unable to make its considerable loan payments to American banks to which Haiti was deeply in debt. The brutal U.S. occupation of Haiti caused problems that lasted long after 1934.

Webliography and Bibliography

Beckles, Hilary. 2010-01-19. “The Hate and the Quake: Rebuilding Haiti.” Posted by Sir Hilary Beckles on Jan 19th, 2010 and filed under Caribbean.

Beckles, Hilary. 2010-01-31. “The Hate and the Quake: Part 2” Sir Hilary Beckles, Contributor

“Keep alive in your hearts
the feeling of confidence
that the light of knowledge
will inevitably dispel
the clouds of ignorance,
the conviction
that concern for justice
will ultimately conquer
hatred and enmity.
[... The] proper response to oppression
is neither to succumb in resignation
nor to take on the characteristics of the oppressor.
The victim of oppression
can transcend it
through an inner strength
that shields the soul
from bitterness and hatred
which sustains
consistent principled action.” UHJ 2009

There is such a contrast between the use of the term “principled action” when used here for healing the human spirit and the way it is used in writings referring to doing ethics, applied ethics, ethics talk. Is it about words or deeds?

“Keep alive in your hearts” calls to all of us to sustain consistent principled action freed from bitterness and hatred even when oppressed, refuse to resign to victimization,  be careful not to respond to oppression by taking on the characteristics of the oppressor, struggle to continue to believe that knowledge will overcome ignorance, that justice will conquer injustice, nurture and maintain  inner strength that will sustain us through the most ethically distressing dilemmas of our lives, nurture confidence when you feel doubt, seek knowledge instead of vengeance. This far transcends concepts of ethical codes and minimal ethical standards.

“Some people confuse acting in good conscience with “doing ethics”. While personal good conscience is necessary for acting ethically, it is not sufficient.  There is also confusion of so-called “codes of ethics’ which are really codes of professional etiquette – for instance, between physicians or between lawyers – or which define unprofessional conduct, with codes of ethics properly so-called. Just because certain conduct does not breach professional norms, does not necessarily mean that it is ethical [...] “Doing ethics”, especially by an ethicist, requires one to undertake an informed structured analysis that will assist in the identification and prioritisation of the full range of values relevant to, or affected by, the various decision options that are open in any given situation. It is inevitable that one’s own values come into play, but they should be identified as such and the other people involved advised of this. I sometimes imagine that “doing ethics” can be compared with opening a beautiful, intricately painted fan. The struts are the different schools of ethics, or the fundamental bases of the alternative analyses that could be used. The fabric that joins the struts may display one or several scenes. When we all agree on the outcome, although we do so for different reasons, we are choosing a different location in the one scene. When we disagree on the outcome, we are identifying several scenes and arguing that one scene is fundamental and should take priority in setting the overall tone or interpretation of the painting that the artist has portrayed on the fan, and that the other scenes must be interpreted in light of this. We all need to learn how to do ethics, even if we do not always succeed in doing this. “Doing ethics” is not a simple task; it is a process, not an event; and, in many ways, no matter in which capacity or context we do ethics, it is a life-long learning experience. The most important requirement, however, is that we all engage in that process, that is, we all participate in “ethics talk” (Somerville 2006).


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