1. CANADIAN TEACHERS FEDERATION PRESIDENT’S FORUM Edmonton, 12-13 July 2010 FORCES FOR CHANGE: EDUCATION FINANCE

2. Profiles of a crisis: Phase 1: Early warnings 2006 - 7 Nouriel Roubini (as far back as September 2006 – forecast the end of the real estate bubble) Poul Nyrup Rasmussen’s book: “In a Time of Greed” 2007 Joseph Stiglitz Amartya Sen Paul Krugman

3. Phase 2: Pressure builds: 2007 - 2008 Profiles of a crisis: AUGUST 2007 Sub-prime mortgages Structured financial products Where are the toxic products? Inter bank lending freezes THE PARTY STOPS ! DECEMBER 2007 Central banks start to ease credit and money supply AUGUST 2008 US Fed bails out Fannie Mae and Freddie Mac 15 SEPTEMBER 2008 Lehman Brothers collapses 16 SEPTEMBER 2008 US bails out AIG

4. Phase 3: Saving the financial sector G20 LeadersWashington, USANov. 2008 G20 LeadersLondon, UKApril 2009 Profiles of a crisis:

6. Phase 3: (2) Profiles of a crisis: BAILOUTS  AIG  Banks  Auto companies STIMULUS PACKAGES Monetary Stimulus  Reducing cost of credit (interest rates)  Increasing money supply (UK, US, Japan) Fiscal Stimulus  Increase spending  Cut taxes  IMF ESTIMATED IN JANUARY 2009 THAT 2% OF GLOBAL GDP WAS NEEDED FOR RECOVERY  NATIONAL STIMULUS PLANS SHOULD BE COORDINATED TO HAVE BEST IMPACT  PUBLIC SECTOR SPENDING, INCLUDING EDUCATION, WILL HAVE TWICE THE IMPACT OF TAX CUTS

7. Phase 4: Saving the real economy G8L’Aquila, ItalyJuly 2009 G20 LeadersPittsburgh, USA Sept. 2009 G20 Labour MinistersWashington, USA March 2010 Profiles of a crisis:

8. Phase 5: A rush to the exits Greece, Spain, Portugal, Ireland, the Euro Zone sovereign debt crisis OECD Ministerial CouncilParisMay 2010 G20 Finance Ministers BusanMay 2010 Severe budget cutsGermany, France and UK G8/G20 Leaders Muskoka/TorontoJune 2010 Pascal LAMY, DG WTO: “THE SHRINKING AGENDA” Profiles of a crisis:

9. Stocks in companies traded on regulated stock markets TRADITIONAL CAPITALISM Corporate bondsGovernment bonds Banking system Pension Funds Private/Commercial property ShareholdersEmployees Personal and corporate taxation on companies raise capital finance for infrastructure (roads, schools) Circulates credit revenues assets capital gains consumption (VAT) Recurrent spending Debt service on capital/ infrastructure investments Public sector

10. CASINO CAPITALISM HEDGE FUNDSPRIVATE EQUITYSTRUCTURED FINANCIAL PRODUCTS house extensions; car; holiday; college fees OFFSHORE HAVENS PPPs Corporate bonds replace Governments bonds Often funded by private equity for which a major source of finance MORE BONUSES HUGE BONUSES !MINIMIZE TAXES ! MORE COMMISSIONS PROPERTY  SUB-PRIME MORTGAGES Unlisted on stock markets Off bank balance sheets Escape banking Regulations Buy a house (110% mortgage) Raise your mortgage to finance: PENSION FUNDS

11. GLOBAL IMBALANCES The United States N o 1 economy  From balanced budget (Clinton) Coming out of « the lost decade » EU/Euro zone N o 3 economy  Growth slowing Oil/gas producers Emerging economies Developing countries Exchange rates USD, Euro, Yuan Japan N o 2 economy SWFs  To record public deficits (Bush: taxcuts and Iraq war)  Higher unemployment Russia, Gulf States, Nigeria, Venezuela, Norway = Financial flows  Big trade deficit Other OECD countries Eg Australia: Commodities China India, Brazil, Chile, South Africa outsourcing big trade surpluses Africa, Asia/Pacific, Central/South America, Caribbean

12. The next phase? D. Strauss-Kahn, IMF, Vancouver, 22 June: “A road along a cliff” Heavy sovereign debts Double-dip recession Consultation with Stephen Harper 18 June Letter by US President Obama to G20 Leaders, 18 June G20 Statement 26-27 June

13. The risk down the road: DSK again in Vancouver, 22 June “The taxpayers bailed out the banks once. They won’t do it a second time.” IF banks and other financial actors (hedge funds, etc.) continue to speculate … IF the financial sector is insufficiently regulated … IF regulation lacks global coherence … and IF there is no reserve for a future bail-out The global economy could reach ….the end of the road

14. March 2009 – March 2010 Financial markets had recovered significantly Upswing continued to March 2009

15. An indicator of global trade: The BDI shows increasing signs of stress

16. June 23, 2010, 3:58 PM GMT Don’t Panic, But The Baltic Dry Is Down Again

18. 5 July 2010: 25,900,000 hits for "recession is over“ Radio Canada, 22/4/2010: Rapport du FMI: la récession mondiale est terminée!! BBC News, 23/5/2010: Is the recession definitely over now?

19. OECD has predicted a jobless recovery

20. Unemployment increased steeply in Industrialized countries OECD does not project much improvement in employment in 2010 - 2011

21. TUAC trade union advisory committee to the OECD CSC commission syndicale consultative auprès de l’OCDE Global Economic Prospects for 2010 – according to the IMF

24. The World Bank: 6 July 2010  Many are still being left behind  43 poor countries are suffering effects of the global recession  They face $11.6bn shortfall in core spending for health, education, etc Global economy is showing signs of recovery, but

25.  64 million more people will fall into extreme poverty in 2010  30-50 thousand more babies may die in Africa this year  1 billion people could go chronically hungry this year The World Bank: 6 July 2010 The crisis is jeopardizing years of progress in fighting poverty

26. The World Bank: 6 July 2010 The poorest countries have been hit hard in 2009

27. The crisis increased poverty rates in comparison to what they would have been without the crisis. This is the case for all these four countries. Source World Bank

28. While the global focus on food prices has waned, domestic staple food prices in several countries have experienced double digit increases in 2009, particularly in Sub-Saharan Africa. Source World Bank

29. THE ILO: THE FINANCIAL AND ECONOMIC CRISIS: A DECENT WORK RESPONSE

32. Dominique Strauss-Kahn, London 23 November “The old growth model is dead” “The old model under which households in the USA and elsewhere propelled the global economy with their voracious appetite for consumption, is dead – or at least on its last legs” “This shift would be helped by stronger social security systems and higher spending on health and education” “Exit too soon, and you kill the recovery. Exit too late, and you sow the seeds for the next crisis” “Exiting too early is costlier than exiting too late” Repeated in Peru 22 June 2010.

33. PARADIGM CHANGE From:Global imbalances Inequity Casino capitalism To:Decent work Just transition to green jobs Equity Health and education A paradigm for sustainable recovery

34. THE UNWANTED PARADIGM Back to: A new cycle of massive profit-taking Monetary easing of Oct – Dec 2008 created liquidity Stimulus packages were financed by banks So: “Bank bonuses make a come-back” The Wall Street Journal, 14 Oct 2009: 23 firms will pay $140 billion this year – back to 2007 levels A new round of speculation –until the bubble bursts again And this time, no more room for monetary easing or fiscal stimulus !

35. THE BIG THREAT TO PUBLIC EDUCATION Declining public revenues “Exit strategies” to reduce deficits

40. CTF-FCE Research Chart E. Share of Consolidated Provincial/Territorial and Local Government Spending in Canada Allocated to Elementary-Secondary Education Drops to Lowest Level in Two Decades in 2007 ‑ 08e EDUCATION FINANCE IN CANADA

41. CTF-FCE Research Chart D. Shares of Consolidated Provincial/Territorial and Local Government Spending Allocated to Elementary-Secondary Education in 2007 ‑ 08e EDUCATION FINANCE IN CANADA

42. FOUR KEY MESSAGES 1.DEFEND AND DEVELOP QUALITY PUBLIC SERVICES 2.CLOSE THE FINANCING GAP FOR EFA 3.PROMOTE A “SURGE” IN VOCATIONAL EDUCATION AND TRAINING 4.ETABLISH A NEW GLOBAL PARTNERSHIP FOR TEACHER EDUCATION AND PROFESSIONAL DEVELOPMENT

43. REASSERTING VALUES VALUES EI’s VISION FOR EDUCATION AND SOCIETY  Education is a public good not a commodity.  Education is central in our societies in many ways;  Quality education requires quality teachers  Education unions should be key actors  Education is a human right. social and economic; building and defending democracy; individual fulfillment; community development;  Education should promote equity non-discrimination understanding among peoples

48. CTF PRESIDENT’S FORUM Edmonton, July 12, 2010  Gracias  Merci  Thank you Bob Harris Education International bob.harris@ei-ie.org

49. www.ei-ie.org/handsup

50. http://fundingeducation.blogspot.com/ Blog: