Some tough questions about Tiff Mackrem’s inflation



Inflation is bad, according to Bank of Canada Governor Tiff Macklem.And although no amount is too much to pay for such insight (in this case somewhere north of one-third of a mill, a plus advantage), I have one when he says, “Frankly, Canadians have to ask us some tough questions because inflation is too high.” What Causes Inflation?

The most important lesson history teaches us is that ideas matter most to those who tell us what they are. Does appeasement or strength prevent aggression? Are traditional families oppressive or irreplaceable? is it?

Without a reliable general theory of money, our particular policy could, for example, lead to inflation of about 7% when your mission was to keep it at 2%…Macklem ‘s #onejob is to prevent inflation, or so it may seem, but he really needs to have a ready and stable answer. .

what is that?In his recent panic-inducing comments He said The Halifax Chamber of Commerce said, “While some of this inflation reflects global developments beyond our control, Canadian inflation increasingly reflects what is happening in Canada. So, recently the cause has changed. strange.

Still, it’s clearly not printing much money.Otherwise, how did it come in from abroad? Dramatic differences in inflation across countries(including 83% in Turkey and 3.3% in Switzerland) do not favor the mostly international hypothesis).

As for general theory, Macklem’s default position seems to be that of John Maynard Keynes. Keynes’s highly influential but highly illegible The General Theory of Employment Interest and Money states in 1936 that if governments hand over their claims for wealth in difficult times, that wealth will be equal to the market. It springs up in a way it couldn’t. Despite its very dubious rationale, it was very attractive. Because it clearly confirms the interventionist intellectual instinct, seems to have worked economically for 20 years, and even borrowed money and newly printed money has been politically driven by austerity as votes surged. It is certain that it has prospered.

Unfortunately, by the late 1960s, an important trade-off between Keynesian inflation and unemployment became apparent. There, compassionate politicians, guided by competent bureaucrats, managed to “tweak” the economic machinery and create good jobs without “overheating,” which simply wasn’t the case. Waited for my daughter to fall asleep. Unemployment and inflation rose with government expansion, and even desperate measures only temporarily reduced the former while pushing the latter up relentlessly.

Ultimately, by some intellectual counter-revolution, the Nobel Prize in Economics went to Milton Friedman (“Inflation is always and everywhere a monetary phenomenon”) and Friedrich Hayek (“Aiming to maximize employment achievable in the short run”). was dropped. Monetary policy instruments are essentially the policies of desperate people who have nothing to lose and who can get all from a short respite space. ”)

Alas, many decades ago, Henry Hazlitt warned against Keynes’s flippant remarks by shallowly warning that “in the long run, we are all dead.” I am in Canada today. And because the welfare state is an economic loser but a political winner, it is very difficult to get out of the hole it dug and filled with paper money to promote prosperity.

No, really. Keynes literally said something like that would work. And our biggest problem is that we’re still in that hole intellectually.

In his remarks in Halifax, Macklem said he would move away from “cost-push” inflation (“Most of the inflationary spikes we are experiencing are explained by rising prices of energy, food and tradable goods”). pounced on the science (“Inflation expectations could be volatile and high”). Inflation can be self-fulfilling”) to Keynesian (“Spending to the economy needs to be delayed so that supply can keep up with demand”). This discrepancy has even made both high and low inflation sound bad (“high inflation makes life more difficult for Canadians, especially those with low or fixed incomes” and “a sense of helplessness”). “It is more expensive for households and businesses to borrow and therefore spend.”) But at bottom, he is a Keynesian tinkerer who “affects the supply and demand balance of the Canadian economy.” I am confident that we can use monetary policy to

So, coming back to the first question for coherent and brief clarity, what do you think causes inflation? And if you’re so smart, how did your theory fail you so badly? is it?

Views expressed in this article are those of the author and do not necessarily reflect those of The Epoch Times.

John Robson


John Robson is a documentary filmmaker, columnist for the National Post, contributing editor for the Dorchester Review, and executive director of Climate Discussion Nexus. His latest documentary is ‘The Environment: A True Story’.