Personal Finance

When will the economy finally get back to normal?

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  • Feb 17th, 2013 7:36 pm
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[OP]
Deal Addict
Sep 5, 2010
2347 posts
374 upvotes
Toronto

When will the economy finally get back to normal?

When will the economy finally improve ? It seems like since 2008, things haven't gotten back to normal. I am talking about both north America in general. Unemployment may have come down but GDP growth is low to average at best. And we are constantly and increasingly being told to save more money and take on less debts. We are in 2013 and you would think this advise is from 2008-2009 but it seems like it is still applicable to today.*

And here is the question: if Mark Carney keeps telling consumers to save their money, who will spend and spur the economy? Corporations, unfortunately, are hoarding too much money and are not willing to start spending and investing it, to create some much needed jobs.*

Thankfully, I do have a job myself, but I feel bad for all the people out there who don't. And like I mentioned, after 5 years of all these bad economic news and situations, it is nowhere to being back to normal, let alone firing on all cylinders.*

Who is to blame? Is it just an economic cycle that we will eventually break out of? Is Obama's failed policies to blame? Is it Europe? Or is all the above?

The way I see and read it, we won't be back to normal conditions (think 2007 levels) until at least 2015 or later. I understand the 2008 recession was a very bad one, but then again this is not the 1939s and recovery should take less time. Just as we have made a lot of advancement in science, the same applies to the economy, where we should have a better grasp on how things work. Or do we?*
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33 replies
[OP]
Deal Addict
Sep 5, 2010
2347 posts
374 upvotes
Toronto
BTW I understand that Canada didn't have it so bad, but that is only when compared to the rest of the world. I applaud the job that Flahrty (sp) and Harper have done to weather the recession, but am sure it doesn't matter much if you are out of a job.
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[OP]
Deal Addict
Sep 5, 2010
2347 posts
374 upvotes
Toronto
Urbanpoet, good reply. And I kinda agree with you. But my question is, why did the effect of globalization suddenly start in 2008? It really was sudden and not an evolution. Was this just a timing thing?

Ironically, the way I see it, the way to deal with destructive forces of globalization is to go local. And you are seeing it everywhere 'Buy American', 'Buy Canadian' and other initiatives to encourages people to spend their money locally.

Actually I also blame the Internet for this. Think about it, so many big box electronics stores have gone out of business or reduced their staff. Why is that? In one word: 'Amazon.com'!

The amazon.coms of the world are getting most of business at the expense of many various retailers. So while these many retailers could have hired xxxxx amount of workers, Amazon will do it all using only xxx amount of employees. The Internet is making very few very rich while making thousands lose their jobs.

I guess the Internet is another extension of globalization or vise versa.

And by the way, am a supporter of capitalism. But not the extreme version.
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[OP]
Deal Addict
Sep 5, 2010
2347 posts
374 upvotes
Toronto
BTW I am very big supporter of buying Canadian. I will even go out of my way and go to Mr. Sub for example than go to Subway, not that I have anything against the latter. And I will buy my home renovation materials from Rona than to give my business to Home Depot.
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Deal Addict
User avatar
Sep 16, 2012
3121 posts
345 upvotes
Mississauga
I doubt things will go back to 2007 levels anytime soon until in Canada we reform and change some of our economic policies,

1. Finally develop a national energy policy, that includes all stakeholders and connects our natural resources both to new markets but also to markets already in Canada.
2. Improve infrastructure to connect and develop better trade, travel and commerce networks throughout the country.
3. Deflate the housing bubble and begin to invest capital projects that cover more broader industries not just housing.
4. Actually take steps to improve employment through these free trade pacts we are signing.
5. Gradual reform educational institutions to better fit the needs of the workforce and also ensure that continued creation of small to medium business is fosters not destroyed.
6. Increase interest rates and reform such programs as CPP and EI to better fit the changing dynamic of the workforce.
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User avatar
Feb 15, 2008
26318 posts
3234 upvotes
Calgary
This is a really complicated question, and it depends upon what industry you're in. For instance, the period from 2003-2008 was called the so-called 'jobless recovery'. Employment prospects weren't particularly great, especially for professionals. Over the past decade, on a relative basis, public servants, people in the financial industry, real estate industry, and oil and gas have done fairly well -- mostly in the trades and in technician/technologist roles. Manufacturing, technology, and other sectors experienced terrible employment prospects.

Going forward, governments seem to be fairly broke, so their ability to expand employment will be limited (they drive the healthcare sector as well). Oil and gas suffers from overcapacity. As does real estate and the financial industry generally. Leaving many people to question what will be the employment driver going forward?

In the 1990s, Canada had a fairly good economy when some of our most innovative people, in R&D, were put to work. A lot of wealth was created for Canada. I expect that if people are looking for the economy to get better, strong R&D hiring will be a precursor to such. Basically if you want to know the real health of the economy, watch the engineering job listings! If they start to suddenly surge, on a broad basis, and across industries, then an economy recovery may be in the pipeline a year or two later. After all, it is generally engineers that engage in R&D and design work, that is the precursor to most sustainable economic activity.

So, in conclusion, there probably will never be a configuration of the economy that is particularly great for literally everyone, although putting engineers to work usually will lift the tide of all boats through rising productivity and higher living standards. But some sectors are likely to come back into favour over the next decade, while others will fall. Engineers may very well be partying a couple years from now, while bankers, accountants, and Realtors fill the RFD Careers forum complaining of few job prospects and a lack of professionalism in the sector (something we see from engineers today, although the grumbling in healthcare, finance, and accounting seems to be rising!).
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Deal Fanatic
Mar 24, 2008
6247 posts
2708 upvotes
Toronto
Just to provide a different perspective, things were always like this - volatile. There have always been recessions and bubbles where people lost jobs causing a great deal of financial distress. If you look at the "recovery" from a technical perspective, the unemployment rate has gone down (compared to 2008-2009) and the stock markets are back at the pre-2008 level.

Point is, there is no "normal" to return to.
Deal Addict
Jan 19, 2011
3012 posts
1286 upvotes
This is normal
"The truth is incontrovertible, malice may attack it, ignorance may deride it, but in the end; there it is."
Just a guy who dabbles in lots of stuff learning along the way. I do have opinions, and readily share them!
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User avatar
Dec 26, 2010
1736 posts
773 upvotes
Calgary
When will the economy finally get back to normal?
My friend said the same thing. Except it was an answer to a question. He has his money sitting on the sidelines and won't invest until the markets are back to normal. I asked him what "normal" is and he didn't have an answer to that question. He missed out on big returns in the stock market in 2012, even though the news was quite pessimistic for the year. The reality is that what you see today is quite normal.

It seems like everyone assumes that a raging bull market (where you only hear positive things) is the normal.
Deal Addict
Aug 28, 2010
3521 posts
1221 upvotes
Halifax
Woodbridge905 wrote: Ironically, the way I see it, the way to deal with destructive forces of globalization is to go local. And you are seeing it everywhere 'Buy American', 'Buy Canadian' and other initiatives to encourages people to spend their money locally.
Massive amounts of Canadian jobs rely on foreign trade. If we start shunning imports, other countries will do the same with Canadian imports and their will be huge job losses.

We're a small country and much of our prosperity is dependent on our ability to trade outside our borders.
Deal Addict
Aug 28, 2010
3521 posts
1221 upvotes
Halifax
olek86 wrote: 1. Finally develop a national energy policy, that includes all stakeholders and connects our natural resources both to new markets but also to markets already in Canada.
Both the British North America Act of 1867 and the Canadian Constitution make it extremely clear that natural resources are primarily the domain of provincials governments.

No matter how much it may make sense for the country as a whole, Alberta is not giving up control of their oil. If it makes sense for Alberta to have more distribution of energy within Canada, then Alberta will do it. If it doesn't, they won't. End of story.
Deal Addict
May 2, 2007
3013 posts
268 upvotes
Kingston
Stop looking for cheapest price.

Stop buying overseas
Stop buying from USA just because it's cheaper.
BUY Canadian made products from a Canadian retailer.

Sure that tv might be $200 more here, however buying from a B&M helps keep a person employed.
Deal Addict
May 2, 2007
3013 posts
268 upvotes
Kingston
The government should also stop huge tax breaks from companies who buy Canadian companies just to uproot them 4 months later to the usa to get their tax breaks.
Sr. Member
Aug 29, 2004
872 posts
148 upvotes
olek86 wrote: I doubt things will go back to 2007 levels anytime soon until in Canada we reform and change some of our economic policies,

1. Finally develop a national energy policy, that includes all stakeholders and connects our natural resources both to new markets but also to markets already in Canada.
2. Improve infrastructure to connect and develop better trade, travel and commerce networks throughout the country.
3. Deflate the housing bubble and begin to invest capital projects that cover more broader industries not just housing.
4. Actually take steps to improve employment through these free trade pacts we are signing.
5. Gradual reform educational institutions to better fit the needs of the workforce and also ensure that continued creation of small to medium business is fosters not destroyed.
6. Increase interest rates and reform such programs as CPP and EI to better fit the changing dynamic of the workforce.
This is an excellent post. Especially agree with #s 5/6. We need to change the current situation with both education and the safety net to be better able to focus on what the economy needs, not what people want to do.
Deal Guru
Jun 26, 2011
14737 posts
4870 upvotes
GTA
starboy869 wrote: The government should also stop huge tax breaks from companies who buy Canadian companies just to uproot them 4 months later to the usa to get their tax breaks.
This.

Make any tax breaks dependent on creation and maintaining of Canadian jobs.
Deal Addict
Aug 28, 2010
3521 posts
1221 upvotes
Halifax
RolandCouch wrote: Make any tax breaks dependent on creation and maintaining of Canadian jobs.
Normally there are requirements to keep a certain number of jobs for a certain amount of time.

If someone has an actual example of a company that was given huge tax breaks to buy a Canadian company and then moved all of the jobs 4 months after they bought it, I'd love to hear it.
Deal Guru
Jun 26, 2011
14737 posts
4870 upvotes
GTA
FunSave22 wrote: Normally there are requirements to keep a certain number of jobs for a certain amount of time.

If someone has an actual example of a company that was given huge tax breaks to buy a Canadian company and then moved all of the jobs 4 months after they bought it, I'd love to hear it.
But I wonder what the length of time is in relation to the amount of funding? It's something that needs to be discussed. We can't be giving out millions and millions to keep a few jobs around for only a year or so. It doesn't make sense.
Deal Fanatic
Apr 16, 2007
8132 posts
3466 upvotes
Financial District B…
FunSave22 wrote: Normally there are requirements to keep a certain number of jobs for a certain amount of time.

If someone has an actual example of a company that was given huge tax breaks to buy a Canadian company and then moved all of the jobs 4 months after they bought it, I'd love to hear it.
Eatons!
Sears was given huge financial perks both by landlords of the failing Eatons stores in various locations including Cadillac Fairview downtown Toronto.
Yeah sure Eatons was failing prior to Sears' buyout but Canada's(yes the gvnmt was in on saving it) motivation was to find a buyer and keep the Eaton's moniker because of the retailers 130yr old history.
Though jobs we're not killed in the attempt to save Eatons, the company didn't last. People lost confidence in the retailer's name.

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