Month: August 2009

Green Shift? Hell no!

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Just ran across this chart (tip of the toque to those worthwhile blogging economists) which seemed so remarkable I thought it worth sharing:

The Economist has a piece out this week that looks at taxes on gasoline across all 25 or so OECD countries and, after adjusting for inflation, exchange rates, etc., compares gas taxes in 1998 versus gas taxes this year. Guess what? Canada and Australia are the only two OECD countries whose gas tax is less now than it was in 1998!

Not only that, but Canada's gas tax is the second lowest (at about 13 euro cents a litre) in the OECD. The U.S. tax rate is lowest at about 8 euro cents and Turkey's is off the charts at 70+ euro cents a litre.

Just thought you'd all like to know …

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Since they won in October, Tories have issued 1,582 funding announcements, totalling $69 billion

Whether it's Human Resources Minister Diane Finley announcing the rollout of the $8.3 billion Canada Skills and Transition Strategy or Treasury Board President Vic Toews trying to score a couple of political points with a $1,000 grant for a veterans project in Winnipeg, the federal Conservative government has been more active than ever spending money in its first year in office, rolling out more than 1,580 spending announcements since it was elected in October, 2008.

Canwest News Service has tracked and logged each press release. In our database, we note the date of the press release, the minister in whose name it was issued, the department in whose named it was issued, the MP who is quoted in the release and is trying to take the political credit for the spending, a brief summary of the spending initiative, and the jurisdiction from which the release was issued. (We try to live-tweet each spending announcement. If you're interested, tune in by following @ottawaspends)

Press releases are not issued every time the federal government spends money – no release goes out every 2 weeks when Ottawa issues paycheques to its employees, for example — but press releases are issued when the government of the day wants to make a point about something or draw the public's (and media) attention to a particular funding announcement.

The point of the database, to be clear, is not to settle debates on whether stimulus money is actually flowing (I know of no public database that actually tracks that). And we do not differentiate between old money, new money, money for this year, or money to be spent over the next five years. Instead, it's a useful tool to help look at what region the government is focusing on in any given time period; what ministers and MPs are most active in handing out cash; and if whether or not there are any discernable trends in the government's spending patterns.

For example, earlier this year, we used the database to make the case that Conservative ridings seem to be getting way more attention from a federal government program set up to help seniors groups than ridings held by anyone else. Indeed, of the 50 or so announcements we tracked, all but one was benefitted a Tory riding.

Now, some (like NDP MP Olivia Chow) will ask if, with this flurry of announcements, if there are actual “shovels in the ground”. This database can provide no substantive answer to that question beyond anecdotal evidence that it would seem to me that projects are underway. For example, on August 28, Senator Fabian Manning, acting on behalf of ACOA Minister Keith Ashfield, said that the town of Carbonear would have $183,000 to fix up the local swimming pool. I suspect that Carbonear, now that the money is committed, will be getting to this project toot sweet.

Similarly, I'll bet the town of Elbow, Sask. is likely to move quickly to upgrade the local fitness centre using $3,333 worth of federal funds. And I suspect the urgent need for a new primary school in Wabaseemoon First Nation in northern Ontario means that, now that the feds have publicly committed $25 million, they'll be building it mighty quick.

Still, as I said: We cannot say from this particular research project if the government is delivering as it said it would but we can report on the following:

  • Since Oct. 14, 2008, when Stephen Harper's Conservatives won their second minority government, the federal government has issued 1,582 press releases announcing or committing to spending projects totalling $68,866,889,002.
  • The five biggest by spending commitment:
    1. $8.3 billion – 13-Mar-09 Diane Finley HRSDC Canada Skills and Transition Strategy Ottawa ON
    2. $5 billion – 08-Jul-09 Peter MacKay DND New Land Combat Vheicles Oromocto NB
    3. $4 billion – 20-Dec-08 Tony Clement IC PM and Premier McGuinty Announce Financial Support for the Auto Industry Toronto ON
    4. $ $2.9 billion 23-Dec-08 John Baird INFC Canada funds Ontario Infrastructure Ottawa ON
    5. $2 billion 13-Mar-09 Diane Finley HRSDC Municipal Infrastructure Loans Ottawa ON
  • The five smallest by spending commitment:
    1. 14-Nov-08 Greg Thompson VAC Government Helps Groups Honour Veterans in Manitoba Winnipeg MB $1,000
    2. 04-May-09 Diane Finley HRSDC Cercle de Fermieres de Courcelles seniors capital projects Courcelles QC $1,530
    3. 10-Jun-09 Diane Finley HRSDC For hotel to hire disabled person to work the kitchen Keremeos BC $1,560
    4. 14-Nov-08 Greg Thompson VAC Government Helps Groups Honour Veterans in Prince Edward Island Charlottetown PE $1,600
    5. 24-Aug-09 Diane Finley HRSDC 1st cheque presented for apprenticeship incentive program Surrey BC $2,000
  • Ministers handing out the most money:
    1. Human Resources Minister Diane Finley: $22,122,676,808
    2. Transport and Infrastructure Minister John Baird $13,395,199,820
    3. Industry Minister Tony Clement $10,516,964,544
    4. Defence Minister Peter MacKay $7,586,500,000
    5. Public Works Minister Christian Paradis $3,012,257,210
  • Ministers issuing the most press releases:
    1. Human Resources Minister Diane Finley 295
    2. Heritage Minister James Moore 228
    3. Western Economic Development Corporation Lynn Yelich 187
    4. Canada Economic Development for Quebec Region Denis Lebel 171
    5. Atlantic Canada Opportunities Agency Ashfield 152

One other point here: The Hill Times recently reported that, since Parliament broke for its summer recess on June 22, the government had made (as of Aug 24), about $2 billion in spending announcements. I'm not sure what dataset the Hill Times is using but our dataset shows something remarkably different:On or after June 22, 2009, the federal government has issued 538 press releases with more than $10 billion in funding commitments. More than half of that was $6.15 billion for the purchase of new combat vehicles for the army and Chinook helicopters for the Air Force. But even without those two monster defence contracts, the government, is at nearly $4-billion in spending commitments over the summer.

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Missouri Republican Williams wants Ignatieff "guarding our northern flank"

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Yancy Williams (left), is a thirty-something Republican from Jefferson City, Missouri who worked on Rudy Giuliani's presidential run in 2008, collects a paycheque for a Republican senator from Missouri, and has recently volunteered to be his state's chairman for Republicans For Ignatieff. As in Michael Ignatieff. Leader of the Liberal Party of Canada.

” I want that guy guarding American’s northern flank,” Williams told me in a telephone interview last week. “I think he’s spent enough time in the U.S. that he’s got a firm understanding of Americans, American policy and I’m comfortable with that.”

Williams is perfectly aware that the guy who is prime minister right now, Stephen Harper, leads a party called the Conservative Party of Canada.

“I have no particular criticism of your current prime minister. I just don’t feel that he has the tie to the United States that Ignatieff has. Ignatieff lived here. From what I’ve seen — I don’t know that he considers it his home but he certainly considered himself one of us while he was here. He spoke very fondly of us, defended our actions when we were defending ourselves,” Williams said.

Of course, that last quote from Williams dovetails nicely with one of the attack lines of Canada's Conservatives: That Iggy is “Just Visiting” and that he really wishes he lived somewhere other than Canada.

That meme or talking point repeated by Williams is one reason why many in Ottawa — reporters, Conservatives, Liberals, and others — thought that RepublicansForIgnatieff.com was, in fact, just a spoof site set up by one Iggy's Canadian political opponents. It may yet be. Williams has no idea who “The Colonel” is behind the site but, when he first ran across the site in early August, it felt legit to him and so, after reading up a bit on Ignatieff's positions, he signed on with the goal of helping a Canadian liberal, Michael Ignatieff, become the next Prime Minister of Canada. So if it is a spoof then the joke's on me and, it appears, on Williams.

“I have to admit, I was not fully educated on your [electoral] race,” Williams said. “But I signed up. And I got an e-mail back. They asked a little bit about me. I said, I work in politics. I’m a Republican. What do you need? And they said, “We’re not 100 per cent sure, right now but go try to talk to others and see what sort of support you can find and that’s what I did.”

For Williams, Iggy is the right man to lead Canada because of his views on North American security and on energy security:

“I mean this with no offence to any Canadian because I understand we are wonderful partners,” Williams said. “[But] when we were attacked on Sept. 11, it changed us in an unbelieveable way. We now look at the world differently and every person has to meet the standard: Are you going to be able to protect us? And I think [Ignatieff] does.

“Secondly, I come from a family who’s in the gas and oil business and the tar sands are a huge issue with me. There is a pipeline that is going to run from Hardisty, Alberta to Wood River, Illinois, and that will run straight through the state of Missouri. It will come within a few miles of my home. It’s not yet complete but it will be soon. That is jobs for folks in Missouri. It has Missouri businesses involved. The tar sands are the second largest oil reserve in the world and they happen to be on our continent. When you combine them and ANWAR, we have the ability to seek true energy independence from the Middle East.

“When Sarah Palin came out and said, drill, baby, drill, it hit a nerve with folks here. It really caught on. If we can get the Canadian version which is “Drill, Iggy, Drill”, or whatever you want to say, we need to utilize that source not only for our energy needs but for our national security needs. I think [Ignatieff] is well-suited to run the Canadian government.

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PR Types: Why do you bury the lede in your releases?

Press release writers have it tough, I imagine: Clent/boss wants to you to 'sell' the project, attract the interest of journalists so we'll write stories about the project, and, oh yes, get the bigwigs names up as high as you can. It's that last one that drives me nuts personally. I give you this release, issued earlier this month by Canada Economic Development for Quebec Region:

Sainte-Ursule, Quebec, August 6, 2009 – Acting on behalf of the Honourable Denis Lebel, Minister of State for Canada Economic Development, Jacques Gourde, Member of Parliament for Lotbinière–Chutes-de-la-Chaudière, Parliamentary Secretary to the Minister of Public Works and Government Services Canada and Parliamentary Secretary to the Minister of National Revenue, today joined Jean-Paul Diamond, Member of the National Assembly for Maskinongé and Parliamentary Assistant to the Ministre des Affaires municipales, des Régions et de l’Occupation du territoire, acting on behalf of Laurent Lessard, Ministre des Affaires municipales, des Régions et de l’Occupation du territoire, in announcing …

… You've lost interest, by now, in the rest, haven't you?

Now, really, Mssrs. Lebel, Gourde, Diamond and Lessard must surely be reasonable gentlemen and recognize how silly they all look in insisting their names and titles lead off this relatively routine funding announcement?

Thursday's spending spree: 23 announcements, $419 million

I'm using Twitter, as I've mentioned here before, as an online database to report/count the federal government's spending announcements. As I'm able, I'm going to start posting daily summaries here. If you're confused by the syntax or or how to decipher it, click here.

So, on Thursday, August 27, here's the breakdown: There were 23 press releases issued in one minister's name or another announcing funding of projects with a combined total of $419 million. (And before you ask: No, this is not new money, this is money approved in Budget 2009 actually being allocated for one specific project or another.) Here's a compilation of the 'tweets' at #ottawaspends for this date (RINC denotes the Recreational Infrastructure Fund, a key part of the federal government's economic stimulus plan):


Min Dept Announcer Headline City PR Funding SpendingLocation
Lebel CEDQR Harper Upgrading Laval stadium Quebec City QC $4,500,000 QC
Prentice EC Shea St Dunstan's RC Basilica National Historic Site Charlottetown PE $425,000 PE
Ashfield ACOA MacKay Investing in forests Antigonish NS $5,000,000 NS
Ashfield ACOA Ashfield Holland College expansion Georgetown PE $1,500,000 PE
Strahl INAC Rickford New primary school Wabaseemoon FN ON $25,000,000 ON
Baird INFC Paradis Gas tax transfer Martinville QC $160,847 QC
Lebel CEDQR Lebel RINC – Kiamika municipal park Kiamika QC $12,261 QC
Ashfield ACOA Shea King's Playhouse Georgetown PE $635,000 PE
Ashfield ACOA Manning Cultural projects Trinity NF $490,000 NF
Ashfield ACOA Kerr Revitalizing downtwon Weymouth NS $700,000 NS
Moore PCH Glover Francophone groups in N. Ontario Timmins ON $226,900 ON
Baird INFC Paradis 92 Quebec projects Montreal QC $374,000,000 QC
Moore PCH Bruinooge Cultural Capital designation Winnipeg MB $2,000,000 MB
Goodyear FEDEV Goodyear Conestoga College Kitchener ON $3,300,000 ON
YELICH WD Duncan Salmon Stewardship Centre Port Hardy BC $80,000 BC
YELICH WD Yelich RINC – Expanding hockey arena Loreburn SK $29,000 SK
YELICH WD Yelich RINC – upgrading fitness centre Elbow SK $3,333 SK
YELICH WD Komarnicki RINC Multi-purpose rec facility Grenfell SK $201,566 SK
YELICH WD Yelich RINC – Swimming pool and arena Kenaston SK $27,399 SK
Moore PCH Lebel Comite des Spectacles de Dolbeau-Mistassini Dolbeau-Mistassini QC $10,000 QC
Moore PCH Cannan Lake Country ArtWalk Lake Country BC $10,000 BC
Ashfield ACOA Manning Bonavista Historic Townscape Inc. Bonavista NF $270,806 NF
Yelich WD Hoback RINC Improvements to arena Tisdale SK $205,166 SK

Changes this summer at PMO, CBC, Globe and Mail, Canadian Press

I've been rather taken aback at the number of personnel changes this summer at some institutions here in Ottawa that, for better or for worse (or precisely, whether you want them to or not) play a relatively influential role in the nation's affairs or among journalists in Ottawa or both!

The most important, of course, are changes in the Prime Minister's Office (PMO), the coterie of political staff that helps Harper make the decisions he will make on everything from election timing to Afghanistan.

But here's a quick summary of scorecard changes as the fall approaches:

PMO

  • Guy Giorno remains chief of staff.
  • Departing: Jenni Byrne (going to the party as director of political ops), Mark Cameron, Kory Teneycke, Patrick Muttart, Carolyn Stewart-Olsen
  • New jobs: Jasmine Igneski (Issues Management); Andrew Wallace (Stakeholder Management)
  • Arriving: John Williamson (Communications)

CBC

  • Departing: Chief political correspondent Keith Boag (heads to L.A.), Parliamentary Reporter Susan Bonner (heads to Washington), Don Newman (retired)
  • Arriving: Terry Milewski, Evan Solomon

GLOBE AND MAIL

  • Departing: Ottawa Bureau Chief Brian Laghi (heading to Roundtable on Energy, Environment and the Economy as director of comms and public affairs); Heather Scoffield (moves to Canadian Press)
  • Arriving: John Ibbitson moves from Washington Globe bureau to become bureau chief.

THE CANADIAN PRESS

  • Departing: Jim Brown (retired), Alexander Panetta (moves to CP Montreal), Sue Bailey (moves to CP Newfoundland)
  • Arriving: Heather Scoffield


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Finley, Plett & Stewart-Olsen to be named senators

Just up on our site now ..

Prime Minister Stephen Harper is preparing to reward some of his longest-serving and most loyal political operatives with Senate appointments that could come as early as this week, Canwest News Service has learned.

Doug Finley, who has been the political master strategist for the Conservative party in its first four general elections, will lead a pack of eight Senate appointees that includes Carolyn Stewart-Olsen, who was Harper's second-longest serving aide before her retirement this summer, and Don Plett, who will have to resign as president of the Conservative Party of Canada if he accepts the $132,000-a-year job as senator. [Read the rest]

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On summer tours, Harper on defence, Iggy on offence?

My often helpful little birdy dropped by the other day to put this collection of data in front of me: It seems that, so far on their respective summer tours, Prime Minister Stephen Harper has been pretty much staying in friendly Conservative-held territory while Liberal Leader Michael Ignatieff has been largely touring around ridings that the Liberals do not hold.

This data is up-to-date as of the middle of last week, when Harper touched down in Yellowknife, NWT (held by NDP MP Dennis Bevington) and Whitehorse, Yukon (fortress of Liberal MP Larry Bagnell).

Aug 18 Harper visits Iqaluit, NU Nunavut, Leona Aglukkaq (CPC)
Aug 15 Harper appeared in Summerside, PEI to mark the opening of Canada Summer Games Egmont, Gail Shea (CPC)
Aug 14 Harper visited Chelsea, QC to announce funding to extend Highway 5. Pontiac, Lawrence Cannon (CPC)
Aug 13 Harper appeared in Kitchener to announce the launch of a regional development agency in southern Ontario. Kitchener Centre, Stephen Woodworth (CPC)
Aug 13 Harper attended Conservative BBQ in Oak Ridges-Markham Oak Ridges-Markham (Paul Calandra, CPC)
Aug 5 Harper visited Esquimalt, BC Keith Martin, Esquimalt-Jaun de Fuca (Keith Martin, Lib)
Aug 4 PM announces Pitt River Bridge will soon be open for traffic in Pitt Meadows, BC Port Moody–Westwood–Port Coquitlam, James Moore (CPC) & Pitt Meadows–Maple Ridge—Mission, Randy Kamp (CPC)
Aug 4 PM tours Made-in-Canada Olympic Venue in Richmond, BC Richmond, Alice Wong (CPC)
Aug 4 PM meets with Members of the Persian Community in Surrey, BC Fleetwood-Port Kells, Nina Grewal (CPC)
Jul 30 Harper visits Thetford Mines, QC Mégantic—L'Érable, Christian Paradis (CPC)
Jul 30 Harper visits Adstock, QC Mégantic—L'Érable, Christian Paradis (CPC)
Jul 29 Photo-op at Rona store in Ottawa to highlight the Home Renovation Tax Credit Ottawa-Orléans, Royal Galipeau (CPC)
Jul 4 Harper hosts BBQ at Calgary Stampede Calgary Southwest, Stephen Harper (CPC)
Jul 3 Harper attended the President’s Reception hosted by the Board of Directors of the Calgary Stampede. Calgary Centre, Lee Richarson (CPC)
1-Jul-09 MI participates in the Old Strathcona “Silly Summer” Canada Day Parade. Edmonton, AB (Unheld) Edmonton-Strathcona
1-Jul-09 MI attends Breakfast with Ismailis Edmonton, Alberta (Unheld) Edmonton-Centre
1-Jul-09 MI attends Garden Party Winnipeg, MB (LPC Riding) Winnipeg South Centre
1-Jul-09 MI attends Muslim Canada Day BBQ Winnipeg, MB (LPC Riding) Winnipeg South Centre
2-Jul-09 MI attends Canadian Club Townhall Winnipeg, MB (Unheld) Winnipeg Centre
2-Jul-09 MI attends Ray Simard Golf Tournament Fundraiser Winnipeg, MB (Unheld) Saint Boniface
23-Jul-09 MI visite l’usine Kruger Gatineau, QC (Unheld) Gatineau
30-Jul-09 MI attends Ajay Virmani Fundraiser Oakville, ON (Unheld) Oakville
30-Jul-09 MI attends Innes and Morgan Fundraiser (Private) Toronto, ON (LPC Riding) St. Paul’s
31-Jul-09 MI attends Tour of Barrie Community Health Centre Barrie, ON Barrie, ON (Unheld) Barrie
31-Jul-09 MI attends Ukrainian Canadian Congress Meeting Toronto, ON (Unheld) Trinity-Spadina
1-Aug-09 MI rencontre des résidents d’Amqui à l’occasion d’un dîner. Amqui, QC (Unheld) Haute-Gaspésie – La Mitis – Matane – Matapédia
1-Aug-09 MI assiste à un cocktail partisan Matane, QC (Unheld) Haute-Gaspésie – La Mitis – Matane – Matapédia
1-Aug-09 MI soupe avec des supporters de Nancy Charest Matane, QC (Unheld) Haute-Gaspésie – La Mitis – Matane – Matapédia
1-Aug-09 MI participe à un table ronde avec des intervenants de Ste-Anne-des-Monts Matane, QC (Unheld) Haute-Gaspésie – La Mitis – Matane – Matapédia
1-Aug-09 MI participe à un rassemblement à l’aéroport de Mont-Joli Mont-Joli, QC (Unheld) Haute-Gaspésie – La Mitis – Matane – Matapédia
4-Aug-09 MI attends Grano Lunch FR Toronto, ON (LPC Riding) St. Paul’s
8-Aug-09 MI visits Farmers’ Market Peterborough, ON (Unheld) Peterborough
8-Aug-09 MI attends Liberal Meet and Greet Peterborough, ON (Unheld) Peterborough
8-Aug-09 MI attends Andy Mitchell Fundraiser Bridgenorth, ON (Unheld) Peterborough
10-Aug-09 MI and ZZ attend a lunch meeting with key Liberals from the London region London, ON (LPC Riding) London North Centre
10-Aug-09 MI and ZZ attend a roundtable on the economy with London stakeholders London, ON (LPC Riding) London North Centre
10-Aug-09 MI and ZZ visit Dearness Seniors Home London – Fanshawe (Unheld)
11-Aug-09 MI attends Fred George Fundraiser Bedford, NS (LPC Riding) Halifax West
11-Aug-09 MI Roundtable and Tour of Cape Breton Regional Hospital and Cancer Centre Sydney, NS (LPC Riding) Sydney-Victoria
11-Aug-09 MI attends Cape Breton Community BBQ Sydney, NS (LPC Riding) Sydney-Victoria
12-Aug-09 Tour F or Tri Star (ambulance manufacturing plant) Yarmouth, NS (Unheld) West Nova
12-Aug-09 Yarmouth Town Hall for a meeting with West Nova mayors and key leaders Yarmouth, NS (Unheld) West Nova
12-Aug-09 MI and ZZ arrive in Clark’s Harbour for the town annual Garden Party Clark’s Harbour (Unheld) West Nova
13-Aug-09 Saint John Liberal Breakfast event Saint John, NB (Unheld) Saint John
13-Aug-09 MI and ZZ enter St. John Board of Trade Luncheon. Saint John, NB (Unheld) Saint John
13-Aug-09 MI and ZZ arrive at McKenna FR venue. Cap Pelé, NB (LPC Riding) Beauséjour
14-Aug-09 Auchinleck Potato Farm visit Lower Bedeque, PEI (LPC Riding) Malpeque
14-Aug-09 Meet and Greet Community BBQ Summerside, PEI (Unheld) Egmont
14-Aug-09 Tour- Tignish Fish Plant and Wharf, 175 Judes Point Road, Tignish, Tignish, PEI (Unheld) Egmont
15-Aug-09 Acadien Picnic, Tintamarre Festivities New Castle, NB (Unheld) Miramichi
15-Aug-09 Reception at City Hall Caraquet, NB (Unheld) Acadie—Bathurst
15-Aug-09 Tintamarre Parade Caraquet, NB (Unheld) Acadie—Bathurst
15-Aug-09 Premier's Reception Caraquet, NB (Unheld) Acadie—Bathurst
16-Aug-09 Kabaddi Cup- Kunal to meet Toronto, ON (Unheld) Trinity Spadina
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On Khadr: Harper government fights to keep accused in Gitmo

In the wake of the news yesterday that the federal government will ask the Supreme Court to overturn a Federal Court of Appeal decision ordering it to see Omar Khadr's repatriation. Khadr, a Canadian citizen, has been held in Guantanamo Bay, Cuba, for more than one-third of his life, and is the last citizen of a Western democracy to be held there. Here's a statement from the office of Foreign Affairs Minister Lawrence Cannnon:

Supreme Court Appeal:

The Government of Canada has consistently stated that Omar Khadr faces serious charges. After careful consideration of the legal merits of the ruling from the Canadian Federal Court of Appeal, the Government has decided to seek leave to appeal the decision to the Supreme Court. As the matter is currently under litigation, we will provide no further comment at this time. The Government of Canada has filed a motion for stay pending appeal.

Canada's Position:

Our position regarding Mr. Khadr remains unchanged. In fact, it is the same policy held by two previous governments. Omar Khadr has been accused of serious crimes (including murder, attempted murder, conspiracy, material support for terrorism and spying, all in violation of the laws of war).

President Obama has not communicated any decision to the Government of Canada with respect to the case of Mr. Khadr. As you know the Obama administration has recently taken decisions to proceed with the closure of Guantanamo, halt the judiciary process and also to evaluate each of the cases. It is in our interest to wait for the outcome of these decisions just put forward by President Obama. The Government of Canada has taken its responsibilities with regards to Mr. Khadr, and we will also take our responsibilities when the US Government shares its decision on this case.

We continue to closely monitor the situation, including the work of the American committee formed to study the fate of Guantanamo detainees, including Mr. Khadr. Departmental officials have carried out several welfare visits with Mr. Khadr and will continue to do so. We will not speculate on hypothetical scenarios.

Despite early hot flashes of economic recovery, expect long, slow climb back: CIBC

CIBC Capital Markets chief economist Avery Shenfeld cautions that, though we may see some big growth numbers in this early stage of economic recovery, we shouldn't be deceived: It's going to be a slow climb out of the depths [PDF]:

While a North American recovery is indeed beginning to build, it will be a while before we have a clear picture of its strength and durability. The first leg of growth could prove a bit hotter than suspected, at least stateside. With government stimulus in the US kicking in just as manufacturers restart production to rebuild inventories, American third quarter growth could top 3%.

To some, that could look a lot like a “V” shaped rebound we’re all hoping for. But the true measure of success will be just how quickly private sector final demand is coming back, after stripping out the one-time boosts coming from inventory rebuilding, cash for clunkers, first time homebuyer grants, and tax cuts. If, as we expect, the fragility of the US household sector and a still-strained financial system keeps private sector demand on a lackluster track, what looks at first glance like a “V” might be better pronounced like a “U”, with a longer wait for sustained brisk growth to return.

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