The recession is over?

It was just days ago that the Governor of the Bank of Canada declared the recession over. He claimed that GDP would grow at an annualized rate of 1.3% in the 3rd quarter and 3% in the 4th. This is a rosy outlook indeed. But numbers coming out today reveal the precise opposite. May’s GDP numbers released this morning show that the economy contracted more than the predicted 0.3% in May. In fact, the GDP fell by 0.5% or at a 6% annualized rate. This shows that the recession is actually accelerating, not slowing. Canada’s GDP has been contracting for 10 consecutive months now.

A simple reminder is in order. The capitalists tend to view the world through rose coloured lenses. During the great depression, the talking heads predicted the end of the recession every couple of months and it of course dragged on for a decade. Here in Canada, a steady stream of stats have been released over the last year showing the situation is worse “than expected”. But how do they calculate these expectations? It turns out there is no science to it at all. They simply conduct a survey of “senior economists” and take the average of the numbers given.

Let’s not forget, that these are the same people who led us into this mess. They didn’t see the recession coming and they have been consistently wrong in their predictions about where it is heading. Prime Minister Stephen Harper (who has been known to brag about his economic credentials) famously said during the last election campaign that if there was going to be a recession it would have happened already. Of course, only weeks later he was forced to eat his own words.

I challenge people to compare the forecasting records of these “captains of industry”, to the articles published by the good people at www.marxist.com and www.marxist.ca. It seems the Marxists understand capitalism much better than the Capitalists! Contained in those websites you will find archives of shockingly accurate economic predictions. People like Michael Roberts and Mick Brooks not only predicted this recession in advance, but gave details about exactly how and why it would take place. There are many things that can be said about Karl Marx, but one thing is certain: he developed the best critique of the capitalist system ever written. Marx explained the basic processes at work in a capitalist economy. Those laws that he outlined in the 19th century are still at work today and if anyone wants to understand the recession taking place now, they best familiarize themselves with them.