Elites and the talking heads in the media are arguing about how to respond to Canada’s soured economic outlook. Who should try to boost the economy, the federal government via fiscal stimulus or the Bank of Canada via monetary policy? But while elites argue amongst themselves, the overriding context is a transfer and concentration of economic power upwards. This, not $10 billion here or 0.25% there, is what hamstrings any policy response going to the benefit of the many.
First, some context. Yesterday’s report from the Bank of Canada describing the state of the economy did not make for happy reading. While there is no crash, no panic and no crisis, the picture isn’t particularly rosy. The kind of generalized malaise and stagnation that has affected much of the globe since the last crisis—and that our resource boom staved off—seems to be hitting home. The Bank revised downwards its projections for both growth and inflation, and has a history of being overoptimistic.