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A grim message on inflation

MONTREAL (CP) —
Governments can't do
anything about the
recession. Business can’t
do anything about the
recession. Neither can you.

Thatis the grim message
from John Weldon, head of
McGill University’s
economics department,

And if thal isn’t enough to
depress you, Weldon says

you can forget about the ©

country climbing out of the
economic quagmire this

year. .

Weldon, who served for
more than two years as
secretary of planning and
priorities for the cabinet of
Ed Schreyer's New
Democratic Party
government in Manitoba,
says the experience gave
him “considerable sym-
pathy"’ for government
administrators who are ex-
pected to deai wilh a
faltering economy.

Economists can't agree
among themselves when
the recession began — ar
even what defines it.

Gazing out the window of
his tiny, paper-stuffed
office overlooking McGill's
quadrangle, Weldon says
Canada has been in an
economic recession since
1973-74, when the.
Organization of Petroleum
Exporting Countries sent
oi] prices spiralling.

“It was a classic shock to
the econamic system — the

‘realization that energy
prices were increasing at a
rapid rate and were almost
certain to continue to in-
erease at a rapid rate,” he
said.

“And further, there were
pressures on food prices,
not as traumatic but
perhaps even more con-

“sequential over the long
term.

“What was So traumatic
was that the realization of
its dimensions came in

such a short space af
time,"'

The energy crisis was
compounded by continued,
unprecedented levels of
inflation and high unem-
ployment. .

“In this setting, th
whole episode has some
time to go," said Welden,
“Throughout it, I have
never seen anything but a
receding horizon.”

Weldon studied
economics at MeGill after
the Second World War,
remained as a professor
and gained a reputation as
one of Canada’s leading
jiberal economic theorists.
Among his published works
is one on inflation and its
effects on Canada,

Despite other predictions
of an economic upturn in
1981, he does not believe
that the recession will end
within the next three years.

Weldon said he once
considered OPEC a cause
of the recession but “now I

would say OPEC was toa .

considerable extent merely
a manifestation of a thing
that was already going to
happen.”
What will
recession?
“You have to imagine a

. world sometime down. the

road in which the relative
prices of products of the
land — energy and food —
have to be raised very
considerably in relation to

the prices of other
products.”
And until food and

petroleum prices have
leapfrogged over other
products and services to
reach a realistic level of
predominance, the
professor predicts that the
economic malaise vill
continue.

Some adjustment has
been made “but it is by no
means completely ac-
complished.”

Groups protest
whale export.

VANCOUVER (CP) ~
Fourteen environmental
protest groups in the

* United States are trying to
make one of the killer
whales lounging in a
holding tank at Vancouver

Aquarium a whale without —

a country.

Operating under the
name MONITOR, the 14
have applied to the U.S.
national marine fisheries
service to bar importation
of the smallest of the four
whales currently in Van-
couver to Marineworld
Africa USA in Redwood,
Calif.

Marineworld must
receive a permit before it
can import the whale.

Four female killer
whales were shipped to
Vancouver from Iceland in

’ December, Two will stay at
the. Vancouver Aquarium,
and twoare scheduled to be
shipped to other
aquariums. The two
staying here replace
Skana,the veteran per-
former which died last
October.

“What you have now is

the spectre of a whale
without a country, said
Patrick Moore, Canadian
director of Greenpeace
International. '‘It looks like
they may have an extra
whale oa their hands."

The group claims in its
petition that Marineland
has an “appalling record in
the keeping of marine
mammals."

“The list of mortalities at
this facility since mid-1978
is extensive — 13 resident
animals and two beached
mammals, Many af these
deaths were due to in-
adequate conditions." ;

Stefani Hewlett, a
biologist with the Yan-
couver Aquarium said the
smail whale and one other
which is scheduled for
shipment to Japan, are
having their “room and
board" paid for by whale
broker Brian Hunt from the
International Animal
Exchange. The money is
helping to defray the
$500,000 cost of the two
whales the aquarium will
keep.

DISTRICT OF TERRACE

NOTICE

. 1981 Business Licences are now due.
Persons conducting business within the
municipality are advised to ensure that

they comply

with municipal

‘regulations by obtalning their 1981

licence farihwith.

The following penalty amounts apply
to licences unpald by the Indicated

date.

5 percent penalty applied January 16
plus § percent penalty applied
February 1, plus 1¥2 percent per month

thereafter.

Signed: T.G. Chesterman

Licence Officer

end the

“People are talking in

terms of a decade to make |

adjustment. The Canadian
industrial plan is a 10-year
plan.”

A lingering recesssion

brings its own problems, .

Weldon says.

“You build in pessimism
about the rate of returns
you will get on effort,
whether that effort is in
terms of labor or in capital.

“And you also get a
feeling of uncertainty
about those returns, which
is not some sort of psy-
chological folly. It is
perfectly real. You cannot
see ahead — and if you
cannot see ahead you do
not act.”

The result is that a
recession breeds ils own
paralysis.

The Canadian economy
takes its lead from con-

ditions in the United States:

and Weldon sees nothing
south of the border that
presages relief — not even
the election of fiscally
conservative Ronald
Reagan. .

“My own guess is that
the political actors will not
change the scepe af the
problem much. Reaganite
policies and their net effect
will prove to be only deci-
mal points away from
Carterite policies.

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“The tax cuts,
example, won't happen."
“Nor do Canadian
politicians have the leeway

to intervene sufficiently to..

end the recession, he said.
Voters wouldn'l stand for
the drastic measures re-

quired,

The most serious in-
tervention in the economy
to date, outside of the
federal government’s new
energy policy, was wage
and price controls. Weldon
said —.and they were a
large factor in getting the
Liberals turfed out of
power:

“It (ihe Anti-Enflation
Board) was about the outer
limits ofwhal they can do.”

The Trudeau govern-
ment’s energy policy “will
have some effect an energy
but won't much change the
scope of the recession. ... It
isn’t on a scale to change
the inflation rate or
unemployment + not
significantly anyway."

While Weldon suggests
the recession is inevitable
and outside our contro], he
balks at the idea that it is a
healthy kind of reordering
of the economy — “aside
from whatever Buddha-
like satisfaction it might
give one to contemplate
hardship with  tran-
quillity.”

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