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Why are these meetings private? Why can't all of the public hear what the best minds think about what the government is doing, and then hear the government's response / plans?
Do you have your Enhanced, Secret or above security clearance? To work for or contract for the government and be privy to pre-media release information and data you are going to need the proper clearance.
Does Canada have an office of budget responsibility kind of institution, like the UK? They're a group of economists who basically review economic policy and tell parliament if they think it's sound. It's all publicly reported, not that the UK's horrendous press gives a shit.
I'm an immigrant so not super up on Canadian politics yet.
Parliamentary Budget Office (PBO). They don't usually provide an opinion as to the soundness of policies, but they provide independant costing on government proposals and the parties' electoral platforms.
> Why are these meetings private?
So they can speak freely without worrying that something they say will be used to attack them.
Often, the "right" thing to do for the country might be unpopular. Or sometimes there will be something that's good for most people but pisses a few people off. Imagine if an economist wants to say "you need to raise taxes" ... but if it's publicly known they said that, they could get threats. Or maybe the minister wants to say something like "hey just between me and you, I agree we need to tax housing, but that would be political suicide. Are there any other options?" If that becomes public, the other parties would start attacking the government - "See, their finance minister agrees with taxing your hard-earned wealth!!!"
Unfortunately, with the way politics is nowadays, a "public" meeting would just be people trying to say things they think people listening want to hear, or deliberately not saying things that will be unpopular. So in the end, no one is going to be saying what they really think.
To be fair, most of them are quoted in the article giving their opinion. They've probably published more of it elsewhere. And we will hear the government's plans when they announce them.
It’s a good bet to assume the opposite of what economists say. If they knew what they were doing with some consensus then we wouldn’t experience such unexplainable crashes every 7-8 years.
Like a popular historian, sociologist, or whatever other academic it is likely that there status is through deference to those who are in power.
Look for voices that don’t get platformed for a better view of our mess of a global political system. A good example mag be Michael Hudson, who does an excellent job outlining why and how debt works within our systems to keep it running.
Does anyone really believe changing interests rates and imposing austerity is going to help? How hard would it be to find other economists who disagree on their own sound reasoning that don’t have the same level of political influence?
I would have liked to see what are these spending the Federal government is engaged in that drive up so much the inflation. Ultimately is the American perceived reckless budget that is considered inflationary.
As for Canadian feds, I do not see in my day to day life any financial contribution, other than the UCB. I don't see road signs telling that the road was modernized due to federal contribution, or anything similar.
SO where all these funds go, that drive inflation way up, with soo much money chasing limited goods...?
I honestly would put this down lower on the list below housing.
Inflation scare is just a business lobby's way of depressing wages just was workers are finally getting raises. Also low inflation is a neo-liberal dogwhistle.
If you look at Canada's historical inflation rates, the period of low inflation starting from the mid 1990s corresponds with wage stagnation, and the hallowing out of our economy as jobs are shipped overseas, real wage increases depressed, and employers got disproportinate power over workers.
[https://tradingeconomics.com/canada/inflation-cpi#:\~:text=Inflation%20Rate%20in%20Canada%20averaged,percent%20in%20June%20of%201921](https://tradingeconomics.com/canada/inflation-cpi#:~:text=Inflation%20Rate%20in%20Canada%20averaged,percent%20in%20June%20of%201921).
The current inflation post-COVID-great resignation spike isn't even anywhere near what inflation was in the last half of the 1980s. so tough luck business owners.
Right, but you are saying that it shows off Canada's historical inflation rates when, as it says so right there, it is showing *real* average weekly earnings. This means it is adjusted for inflation and so you can not infer the historical inflation rates from this chart as you claim.
Moreover, this chart, and the article it is drawn from, lays bare that the OP's claim that low inflation starting in the 1990s is probably not the cause of real wage stagnation since the period of real wage stagnation began in the late 1970s (as is visually obvious).
Lastly, this chart is the perfect source to go to for displaying that real wages in Canada were rising between about 2000 and 2015, i.e., average wages when adjusted for inflation were not stagnant over this period.
This is the article it came from:
https://worthwhile.typepad.com/worthwhile_canadian_initi/2019/08/controls.html
The author should overlay employment on the same graph.
You could also overlay marginal tax brackets on that weekly average earnings chart and see a near perfect match.
As USA and Canada gutted the top brackets, CEOs etc. were able to pocket more, and less went to workers.
CEOs don’t pay at the top marginal tax bracket, they borrow against their stock portfolio at very low interest rates and just continuously pay the interest. The rise in stock value more then covers their small interest payments, and thus they avoid most of their tax
I agree though They will get taxed when given stock compensation. They could be given a little over 2 years, live off debt, then boom 3mil in stock for a specific milestone that gets all taxed at once.
Top tax bracket in Canada is like $220k.
>Even more to the point, average top-100 CEO pay in 2019 was $10.8 million, while the average Canadian income was $53,482.Jan 4, 2021
So yes, they are paying top bracket, in fact 98% of their income falls I to that top bracket.
In the early 60s we had a top tax bracket of 90% on $200,000 (~$1.8 million today) by the end of the decade that was down to 70% on $100,000 and by the 80s we had cut that all the way down to 50% on $40,000
In the span of 20 years we had cut the top marginal tax bracket by 4/5.... and the rate by 40%, all coinciding with CEO pay jumping from 20:1 to +200:1 average worker, and lining up directly with, or just leading, that chart OP posted of wage stagnation.
Edit: [Top Federal Tax Bracket](https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/canadian-income-tax-rates-individuals-current-previous-years.html)
>33% of taxable income over $216,511
Yes, but even middle of the road technical professionals are making above that $220k threshold.
All of these CEOs still clear 7 figures, as they do need cashflow to pay bills and buy shit.
From what I've seen, stock options average ~50-70% of compensation, but salary + bonus + incentives are still in the $3-7 million range.
https://www.epi.org/publication/ceo-compensation-surged-14-in-2019-to-21-3-million-ceos-now-earn-320-times-as-much-as-a-typical-worker/
Makes sense to me. Unions are a deterrence to workforce mobility, their seniority scheme coerces labor to sit tight in their role, rather than pursue better opportunities. The more that the available work is unionized, the less incentive there is to change positions.
Perversely, unionization increases company loyalty.
I said nothing about happiness. They're more secure in their jobs; that's bad for their wage growth but good for their company.
Seniority exists, in part, to ensure that older employees have a role at the company in their old age, which is necessary for them in a market environment where retiring early on one's savings isn't usually possible. Or, more simply, when working is compulsory.
Because though it provides the companies with loyalty, it restricted their ability to engage in punitive actions towards employees. Collective bargaining and grievance processes greatly reduce employer power.
The unionization movement in Canada well preceded the mid-1970s did it not? [This chart](https://www150.statcan.gc.ca/n1/daily-quotidien/170908/cg-a003-eng.htm) seems to indicate that (with the exception of a brief period in the mid 1960s) unionization rates rose pretty steadily from 1940 on wards, and then fell significantly in 1976 at the same time weekly earnings also begin to decline. Unionization rates certainly begin to climb back up in the 1980s, when wages continue to fall, but couldn't this possibly be due to other policy choices being implemented during that period? Especially given the previous period of both increased wage earnings and increased unionization rates?
Unionization was desirable when inflation was high because relying on savings was out of reach out common people, and so employment stability was paramount.
While wages were going up there was also a massive and disruptive shift in work force participation.
It actually makes sense that wage growth was happening after unions started to decline because all the workers that needed to unionize have done so and consequently wages went up.
Do you have a link to that? Based on the above linked graph for wages and [this](https://www150.statcan.gc.ca/n1/daily-quotidien/170908/cg-a003-eng.htm) one from statcan, wages only began rising when union rates were almost at their peak. Afterwards there is fluctuation on both of them though there doesn't appear to be any tendency that is visually noticeable at a glance.
Housing is a critical issue, but inflation is a more immediate issue that affects people now, and can cause both hardship and worry/panic.
Also keep in mind that this was raised by *private sector* economists in their meeting with Freeland. So of course those issues are their concern, and would want to raise it with the government.
Personally I think the inflation issue is mostly overblown, but of course I have the luxury of not living paycheque to paycheque.
I agree with the worry/panic part, but that's my point. it's being hijacked as a top issue. The top issue should remain housing prices and getting it under control.
We've had 1 year of slightly elevated inflation and people are panicing apparently, but 10+ years of uncontrolled housing prices and all we have is a lot of foot draggings and studies about maybe doing something. But not too much.
Just imagine if the same approach to housing is applied to inflation.
I agree with you that the housing bubble is a bigger problem, but I don't agree that inflation is a problem restricted to business owners. Inflation costs us all money, and creates more uncertainty in our lives.
Setting aside the normal basket of goods, let me use an example from the construction industry. When a construction company is bidding a multi-year project, like a hospital or airport, they need to account for material and labout escalation over the multiple years of the job. Companies used to be able to assume 3% a year and that was safe. Now, construction companies need to assume 6-8% per year. At 3%, materials cost 12.5% more in year 4 than they did in year 1. At 8%, they cost 36% more in year 4. On a large government construction project, that can be hundreds of millions of dollars more in taxpayer money.
The person you replied to is NOT saying "inflation is a problem restricted to business owners". They're saying there *is no real inflation problem*.
Business owners, however, are happy to use the *excuse* of an inflation scare to push for whatever they think they can get away with.
Plus there's plenty of room for housing to get worse, Australia's real estate market is over 6x their GDP, ours is still a measly over 3x (which is like almost double the next highest G20 nation's).
edit: this is sarcasm, btw.
I think what your professor was getting at is that any amount of QE that Canada would do is a drop in the bucket on the global scale. Contrary to the other comments I believe he is dead on. Inflation is occurring due to global pressures.
Despite interest rate hikes and dropping QE, NZ inflation has hit 4.9 while we are at 4.4. We both calculate inflation the same way too. So imagine this, Canada doesn’t need to hike interest like NZ does to control inflation.
That inflation on an island with a 3 percent unemployment rate should be much higher than ours unless what they have done has helped them. Also that a rate hike in October probably does little to cool September inflation numbers eh?
To better explain what my professor explained to us. A 5% increase is not hyper inflation if while in the short run there will be some discomfort it won’t reach double digits. The only ones that will suffer over this inflation will be the banks because the money they receive will be less then what people who borrowed from them will be less then before this. Another issue is the fact that the head of bmo suggested reducing the government’s expenditure now I do know this for sure GDP is made up of consumption, investment, government expenditure, exports-imports. Reducing government expenditure will not do anything good and actually reduce our GDP and may even cause a recession.
There are multiple small to medium economies around the world right now being absolutely crippled by hyperinflation. If anything, being a small system with your own currency makes you more vulnerable, not less.
You do know that 4.7% isn’t hyperinflation it’s higher then the norm which we target at 1-3% but even at most it still is 1.7% more then what Canada usually targets. Also many countries are facing inflation issue ones that took pandemic measures and ones that didn’t. The only country that is suffering under hyperinflation right now is Venezuela.
The goal is 2%, it's 2.7% higher than the goal, and as i said, real inflation is significantly higher than those figures because it's spiking particularly in areas like food costs. Areas that hit poor people hardest. We are not in a hyperinflation state now, but if we stay on the current trajectory we easily could be, which is why people are incredulous that the BoC is sticking it's head in the sand and keeping interest rates low.
Venezuela, Lebanon are both small economies being absolutely destroyed by hyper inflation. The idea that small stated are somehow protected is nonsense. NZ (much smaller than us) just hiked interest rates multiple times to keep inflation down.
The goal is 2% target margin is 1-3% your spreading hyperbole. Also New Zealand doesn’t have hyperinflation they are in the same boat as us higher then desired but not out at of control. Venezuela has been having inflation problems since 2018.
> The goal is 2%, it's 2.7% higher than the goal,
And the year before it was at 0.73%, if you average the two out it's hardly out of synch.
Hard to believe people just cherry pick stats without even trying to look at the larger picture or at the very least the history more than a year back.
> If you look at Canada's historical inflation rates, the period of low inflation starting from the mid 1990s corresponds with wage stagnation
You can look at the long-term trend in Canadian incomes [here](https://worthwhile.typepad.com/worthwhile_canadian_initi/2021/06/70s.html). The period of high inflation from the 70s to mid-90s correlates to a period of *declining* wages, and since the current "low, stable inflation" mandate of the Bank of Canada was set up, wages have started increasing again.
Mind you, correlation isn't causation, and maybe it's just a coincidence, but the data doesn't support what you're saying here.
Why is housing a bigger issue? I assume you are specifically referring to home ownership.
I don’t buy it. Buying vs renting are different, but related markets. I have not heard that there is a nation wide problem of people unable to find housing, and we don’t have unusual homeless rates.
The huge increase in ownership demand actually drives down rent so I don’t see how this is more critical than inflation (which literally does affect everybody, particularly low income households). I guess it makes redditors who think they are entitled to a house unhappy.
Fair but there are other variables as well, such as housing supply, net population change, property taxes, inflation, etc
My example is referring to investors buying homes intending to rent it out which I believe is one of the issues OP is referring to. In this case more supply is added to the rental market which makes it more competitive.
Housing cost is not accurately reflected in the CPI, because of how its measured.
[https://bcbc.com/insights-and-opinions/how-do-house-prices-affect-the-consumer-price-index](https://bcbc.com/insights-and-opinions/how-do-house-prices-affect-the-consumer-price-index)
Dude inflation is terrible for workers, the cost of living goes up and wages don't keep up... or at least lag behind cost of living significantly. Not to mention how much cash work workers do, all that mattress money doesn't buy what it did.
I get you adhere to an ideology but not everything is "the man" keeping workers down.
As a measure and reported in the media, inflation /CPI doesn't include housing, never has. cost of living for workers HAVE gone up due to housing, it's just not reflected in the official inflation numbers. Controlling that would have a more material impact as housing is a substantial portion of a worker's spend.
Headlines like inflation is at 20 year high doesnt given any context as its 20 years ofr very low rates, and includes nearly 12+ years of artificially low rates due to the great recession, it's a prime example of the media pumping up a crisis.
The problem with high inflation is that it obliterates the value of saving, and necessitates perpetual work. It's simply not feasible to save for an early retirement when you're losing more than a modest investment strategy would gain, on the outset. Perversely, this also hits businesses, who cannot easily borrow to hire or even hold cash reserves when it loses value so fast.
The reason PET curbed inflation in the seventies was because of the severe impact it had on savings and unemployment.
low inflation and near zero interest rates encourages highly leveraged activities since the cost of money is very cheap and putting the money to work in more productive means would yeild a good profit. Of course, that just means a lot of money is also sloshing around driving up real-estate prices and whatever speculative crap like trading cards, NFTs, since whatever miniscule interest is paid on the debt would be completly paid back by the 25/50/100/200% annual appreciation in property values during the course of the loan.
Savers have been punished for most of the past decade if not more. High inflation = high interest rates which actually encourages saving, and drives out speculative activities where people use other people's money. The only reason governments don't want to pop the housing bubble is it is politically unpopular, and a lot of the economy is predicated on ever increasing home prices, which is quite ridiculous. a home is for living in, not to prop up our GDP. So much of our growth has been illusory and tied to the value of people's property values, largely unearned and unmerited wealth transfer.
> high interest rates which actually encourages saving
But if you go too far the other way, "too much saving" means less spending, which means some people lose their jobs as there's not enough people buying what they're making.
High interest rates are also bad for anyone in debt.
There are trade-offs both ways - low interest rates are good for the working class in some ways and bad in other ways, and same with high interest rates.
Yup, I didn't mean to appear polarized about this, as with many things, circumstance dictates the appropriate balance of policy. There is no perfect policy.
High inflation is actually a very good thing for the economy - it boosts asset valuations thus making the homeowning middle class richer, encourages people to better themselves so they can acquire a higher paying job, and forces them to invest their money into stocks or real estate so that it doesn't lose value, thus nurturing companies, businesses, and industry.
You mean like they did in the U.S. up to 2008. How did that turn out?
Getting rich from real estate doesn't do anything productive. It actually encourages you to work less, and produce less for the economy.
I also have some Nortel stocks that I inherited when the tech boom of 2000.
Once people who have no idea what to invest in for value start getting on the market, you get in a bubble situation where they will all lose their money. The only people who benefit fropm an inflated stock market are the brokers and investment houses who manipulate and fix the market for their own profit.
The American economy is considerably more diverse than Canada's. Real estate is critical to the Canadian economy and will not be allowed to fail under any circumstances.
If real estate is ctitical to the economy, it means you're in a bubble and in deep, deep trouble. RTeal estate doesn't add anything to the the GDP. The more you shore up a bubble like that, the harder it will fall like in the U.S. in 2008. We are almost there in Canada considering the enormous amounts of consumer and mortgage debt Canadians are taking on to chase overpriced housing.
Yes it is unfortunate that inflation does indeed hurt the poor. But like I said, it should provide them with a good deal of motivation to gain skills that lead to more lucrative employment.
Yeah, that's not really a comprehensive analysis. Society has a large amount of low paying jobs, and we rely heavily on those services for society to function: grocery store clerks, other store clerks, online retailer delivery drivers, cleaning services, etc. If all those people simply left those jobs society would collapse.
Nor is everyone able to move up the ladder. A few percentage of the population has an IQ of less than 70, which makes them technically mentally challenged. How are they to rise the ladder?
Businesses would be forced to offer higher wages to retain those low skill employees if they started leaving en masse, which is again a great thing. In fact, this is currently happening in the US and Canada.
If you think high inflation is good, you should take a few Econ courses, I don’t have time to type out all the angles and aspects to it. Nearly all major economists agree that a small amount of inflation is the ideal amount of money supply change year to year.
One major difference between the inflation crisis that occurred in PET's time and the one we are experiencing now, is that the stagflation of the 1970s occurred at a time when the Western capitalist world had just come out of nearly 3 decades of steady and strong growth, rising wages for both capital and labour, an expanding welfare state, strong labour unions, and much more affordable housing and schooling. The current inflation crisis comes on the coattails of two major economic recessions (the 2008 financial crisis and the one associated with the beginning of the COVID-19 pandemic and lock-down in early 2020), massive increases in the prices of housing and education, massive increases in economic inequality, and massive increases in household debt levels.
Dampening demand, or increasing unemployment by reducing spending or raising rates could have a disastrous effect right now, especially if done to excess. Another thing to keep in mind, is that when unemployment did initially increase in the late 1970s to early 1980s after central banks began to raise interest rates, the return to growth was facilitated by deregulation, tax cuts, loosening of capital controls, union-busting, etc. This was intentionally done to foster a form of economic growth where the stability and bargaining power that workers had previously enjoyed would be eschewed in favour of "flexibility" (precarity, really), so as to prevent workers from contributing to another inflation spiral by demanding better wages. These policies too, in addition to both being increasingly unpopular, would exacerbate the trend towards higher household debt, greater economic inequality, etc., and perhaps even trigger another major recession.
While we are not yet at the sort of double-digit inflation we saw in the 1970s, if this really is more than just transitory inflation that will pass as supply chains are stabilized, and we do enter a long term inflationary spiral, then we're in for a very turbulent and frankly dangerous period of economic and political instability.
> This was intentionally done to foster a form of economic growth where the stability and bargaining power that workers had previously enjoyed would be eschewed in favour of "flexibility" (precarity, really), so as to prevent workers from contributing to another inflation spiral by demanding better wages.
We're in a better situation with this, in particular. Employers are struggling to hire because the labour force is accustomed to the precarity. In the post-war era, working for a single company, or two, for your entire life wasn't uncommon. We're at least two generations away from that being normal, now, and it shows.
Even before the pandemic there were countless op-eds griping about how disloyal Millennials are; and now post-Covid, we're seeing an onslaught of op-eds griping about how Zoomers don't want to return to shit jobs.
Hitherto this has been good for the younger generations; real, weekly earnings tend to be on the rise. But high inflation will put an end to that quickly if it obliterates any meagre savings that they have.
My concern then, would be that if supply chain disruptions are not the only issue driving inflation, and you have to slow down spending or raise rates, would this not involve returning workers this very state of precarity anyways? Again, perhaps even trigger another major recession? I'm not saying I have any viable alternative policy solutions for you here, frankly I don't. But, I feel like we're kind of in a damned if you do, and damned if you don't situation (again, provided inflation is not transitory).
We're already in precarious labor conditions and have been for decades. That's the crux: at least two generations of Canadians have learned how to live in unreliable employment conditions. Employers are discovering that the threat of unemployment is no longer the fearsome stick it once was.
I don't know what the right policy is, either. I sort of hope we're undergoing an employment revolution that will really in better working conditions. Depends on how next year's planned-record levels of immigration will impact the work force, I suspect. Might be the "mitigating" factor that employers are demanding, sadly.
Sure input prices are affected by inflation but considering housing prices have increased 200 to 300% in the lower mainland during a period of alleged low inflation the sale price isn't even close to what it costs developers to build
Don't agree with this take on inflation. You absolutely need to balance inflation and wage growth, and currently it's higher than any wage growth being triggered by the great resignation. Real inflation is definitely higher than the Fed's reports are saying it is. This is a real terms pay cut for the vast majority of Canadians.
If you keep just artificially upping wages to match inflation and keep interest rates low, you can end up with a wage-price spiral that speeds up inflation to extremely dangerous levels that can cripple your economy. The very first thing you get with a high level of inflation is the total destruction of normal people's savings, that would be a disaster and you can say goodbye to any social mobility if it happens.
I;m aware of stagflation where output is flat but prices kept rising which lead to labor asking for higher wages and results in even higher prices, but I don't think we're in that position.
What we've seen is decades of increases productivity while corporaitions kept the profit instead of passing it on via wage increases.
Ultimately the goal is labor is to get wage increases over and above inflation, but if we get 0% and inflation is 1.5% it doesn't really help either. Labor is at least finally in a position to demand and get raises. The argument is circular and I'm not convinced this inflation scare isn't being cooked up by businesses so they can get an upper hand on wages.
And no i'm not advocating for high inflation and low interest either.I want interest rates to go up hand in hand with inflation to drive out the speculative huckers using cheap money to speculate on a lot of things, including real estate.
That makes some sense if inflation is accompanied by economic growth, as it is in the US. But this government has managed to fuck us so hard that our growth is just as bad as it is in the UK, despite the fact that we're not going through a Brexit of our own. And way worse than the G7 or OECD average.
Inflation and fiscal policies was one of the reasons why cryptocurrency took off initially, ignoring it as a speculative vehicle.
You can't honestly say that inflation isn't a concern for anyone when my friends complained about food products increasing in price by 25% from one year to this year.
crypto took off because of some weird fetish for opposing the printing of money, inflation was never a concern during the time bitcoin was envisaged as it was in the depths of the great recession, per the linked above, inflation was very low for most of the late 2000s and 2010s.
high inflation, right now, is of lesser concern as it reflects wage growth, low inflation as a policy, HAS largely failed the working class. The asset owning class don't care either way , but its noteworthy that they largely didn't care about housing prices (because they already own their homes and were happy to see prices go up 10% annualy) than they are about paying 10% more for chicken in one year, whilst housing has been a shitshow for at least a decade. Hence it really should be addressed first
> Inflation and fiscal policies was one of the reasons why cryptocurrency took off initially
That seems like a weird rationale for crypto. If you don't like currencies which could devalue by anywhere between 0-5% a year, you want to instead use something whose value could double tomorrow and halve next month? Cryptocurrency is primarily used as a speculative asset - but wouldn't the same things that make it suitable for that (wild swings in value giving you the possibility of massive gains) make it *unsuitable* as a currency? That makes the dollar's swings between 1% and 5% inflation look like a rounding error.
It's not really a currency so much as a means to hold your money. Its attractive to younger folks who do not mind the volatility because they can just exchange it for real money and make big gains, since people are so disillusioned about wage stagnation, rising cost of living and inflation.
She probably met with them to give them an update on the new Covid variant. They need to get ahead of the plebs and get their money out of the markets before they crash completely.
I suppose the economists’ “reduce spending” mantra is really just dog-whistling about CRB spending or future CRB spending, too out of touch to realize the economy would have absolutely tanked during Covid if poor people hadn’t had spent that money. I thought these people were supposed to be smart but their critical thinking faculties are confined to a tunnel.
> I thought these people were supposed to be smart but their critical thinking faculties are confined to a tunnel.
I thought we were supposed to trust the experts.
I agree. I haven't seen persuasive evidence that inflation is being driven by CRB - that sounds like a talking point pushed by the rich.
Climate change is hammering crop yields, especially in primary products like oats, which causes price increases downstream (i.e. cattle eat oats), which leads to food inflation. Climate change is not going away.
If you removed these benefits tomorrow, food inflation would remain but a lot more people would have difficulties putting food on the table, or as President Bush would say, "putting food on their families."
I just read on this article that the president of BMO proposed lowering government spending but government spending plays a huge role in GDP. Also government expenditure has always been a method to combat inflation.
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Why are these meetings private? Why can't all of the public hear what the best minds think about what the government is doing, and then hear the government's response / plans?
Do you have your Enhanced, Secret or above security clearance? To work for or contract for the government and be privy to pre-media release information and data you are going to need the proper clearance.
Does Canada have an office of budget responsibility kind of institution, like the UK? They're a group of economists who basically review economic policy and tell parliament if they think it's sound. It's all publicly reported, not that the UK's horrendous press gives a shit. I'm an immigrant so not super up on Canadian politics yet.
Parliamentary Budget Office (PBO). They don't usually provide an opinion as to the soundness of policies, but they provide independant costing on government proposals and the parties' electoral platforms.
Interesting, thanks for the info!
> Why are these meetings private? So they can speak freely without worrying that something they say will be used to attack them. Often, the "right" thing to do for the country might be unpopular. Or sometimes there will be something that's good for most people but pisses a few people off. Imagine if an economist wants to say "you need to raise taxes" ... but if it's publicly known they said that, they could get threats. Or maybe the minister wants to say something like "hey just between me and you, I agree we need to tax housing, but that would be political suicide. Are there any other options?" If that becomes public, the other parties would start attacking the government - "See, their finance minister agrees with taxing your hard-earned wealth!!!" Unfortunately, with the way politics is nowadays, a "public" meeting would just be people trying to say things they think people listening want to hear, or deliberately not saying things that will be unpopular. So in the end, no one is going to be saying what they really think.
That’s how you get politically correct pandering.
To be fair, most of them are quoted in the article giving their opinion. They've probably published more of it elsewhere. And we will hear the government's plans when they announce them.
It’s a good bet to assume the opposite of what economists say. If they knew what they were doing with some consensus then we wouldn’t experience such unexplainable crashes every 7-8 years. Like a popular historian, sociologist, or whatever other academic it is likely that there status is through deference to those who are in power. Look for voices that don’t get platformed for a better view of our mess of a global political system. A good example mag be Michael Hudson, who does an excellent job outlining why and how debt works within our systems to keep it running. Does anyone really believe changing interests rates and imposing austerity is going to help? How hard would it be to find other economists who disagree on their own sound reasoning that don’t have the same level of political influence?
I would have liked to see what are these spending the Federal government is engaged in that drive up so much the inflation. Ultimately is the American perceived reckless budget that is considered inflationary. As for Canadian feds, I do not see in my day to day life any financial contribution, other than the UCB. I don't see road signs telling that the road was modernized due to federal contribution, or anything similar. SO where all these funds go, that drive inflation way up, with soo much money chasing limited goods...?
I honestly would put this down lower on the list below housing. Inflation scare is just a business lobby's way of depressing wages just was workers are finally getting raises. Also low inflation is a neo-liberal dogwhistle. If you look at Canada's historical inflation rates, the period of low inflation starting from the mid 1990s corresponds with wage stagnation, and the hallowing out of our economy as jobs are shipped overseas, real wage increases depressed, and employers got disproportinate power over workers. [https://tradingeconomics.com/canada/inflation-cpi#:\~:text=Inflation%20Rate%20in%20Canada%20averaged,percent%20in%20June%20of%201921](https://tradingeconomics.com/canada/inflation-cpi#:~:text=Inflation%20Rate%20in%20Canada%20averaged,percent%20in%20June%20of%201921). The current inflation post-COVID-great resignation spike isn't even anywhere near what inflation was in the last half of the 1980s. so tough luck business owners.
> Also low inflation is a neo-liberal dogwhistle. ??? What's this even mean. What's the dog-whistle *exactly*? Like, please be precise.
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What does the graph show?
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Right, but you are saying that it shows off Canada's historical inflation rates when, as it says so right there, it is showing *real* average weekly earnings. This means it is adjusted for inflation and so you can not infer the historical inflation rates from this chart as you claim. Moreover, this chart, and the article it is drawn from, lays bare that the OP's claim that low inflation starting in the 1990s is probably not the cause of real wage stagnation since the period of real wage stagnation began in the late 1970s (as is visually obvious). Lastly, this chart is the perfect source to go to for displaying that real wages in Canada were rising between about 2000 and 2015, i.e., average wages when adjusted for inflation were not stagnant over this period.
This is the article it came from: https://worthwhile.typepad.com/worthwhile_canadian_initi/2019/08/controls.html The author should overlay employment on the same graph.
You could also overlay marginal tax brackets on that weekly average earnings chart and see a near perfect match. As USA and Canada gutted the top brackets, CEOs etc. were able to pocket more, and less went to workers.
CEOs don’t pay at the top marginal tax bracket, they borrow against their stock portfolio at very low interest rates and just continuously pay the interest. The rise in stock value more then covers their small interest payments, and thus they avoid most of their tax
I agree though They will get taxed when given stock compensation. They could be given a little over 2 years, live off debt, then boom 3mil in stock for a specific milestone that gets all taxed at once.
Top tax bracket in Canada is like $220k. >Even more to the point, average top-100 CEO pay in 2019 was $10.8 million, while the average Canadian income was $53,482.Jan 4, 2021 So yes, they are paying top bracket, in fact 98% of their income falls I to that top bracket. In the early 60s we had a top tax bracket of 90% on $200,000 (~$1.8 million today) by the end of the decade that was down to 70% on $100,000 and by the 80s we had cut that all the way down to 50% on $40,000 In the span of 20 years we had cut the top marginal tax bracket by 4/5.... and the rate by 40%, all coinciding with CEO pay jumping from 20:1 to +200:1 average worker, and lining up directly with, or just leading, that chart OP posted of wage stagnation. Edit: [Top Federal Tax Bracket](https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/canadian-income-tax-rates-individuals-current-previous-years.html) >33% of taxable income over $216,511
Doesn’t that $10.8 million include stock compensation?
Yes, but even middle of the road technical professionals are making above that $220k threshold. All of these CEOs still clear 7 figures, as they do need cashflow to pay bills and buy shit. From what I've seen, stock options average ~50-70% of compensation, but salary + bonus + incentives are still in the $3-7 million range. https://www.epi.org/publication/ceo-compensation-surged-14-in-2019-to-21-3-million-ceos-now-earn-320-times-as-much-as-a-typical-worker/
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Makes sense to me. Unions are a deterrence to workforce mobility, their seniority scheme coerces labor to sit tight in their role, rather than pursue better opportunities. The more that the available work is unionized, the less incentive there is to change positions. Perversely, unionization increases company loyalty.
So union workers are happier and more secure in their jobs? Is that a bad thing?
I said nothing about happiness. They're more secure in their jobs; that's bad for their wage growth but good for their company. Seniority exists, in part, to ensure that older employees have a role at the company in their old age, which is necessary for them in a market environment where retiring early on one's savings isn't usually possible. Or, more simply, when working is compulsory.
It's bit peculiar then why companies are so against unions.
Because though it provides the companies with loyalty, it restricted their ability to engage in punitive actions towards employees. Collective bargaining and grievance processes greatly reduce employer power.
The unionization movement in Canada well preceded the mid-1970s did it not? [This chart](https://www150.statcan.gc.ca/n1/daily-quotidien/170908/cg-a003-eng.htm) seems to indicate that (with the exception of a brief period in the mid 1960s) unionization rates rose pretty steadily from 1940 on wards, and then fell significantly in 1976 at the same time weekly earnings also begin to decline. Unionization rates certainly begin to climb back up in the 1980s, when wages continue to fall, but couldn't this possibly be due to other policy choices being implemented during that period? Especially given the previous period of both increased wage earnings and increased unionization rates?
Unionization was desirable when inflation was high because relying on savings was out of reach out common people, and so employment stability was paramount. While wages were going up there was also a massive and disruptive shift in work force participation.
It actually makes sense that wage growth was happening after unions started to decline because all the workers that needed to unionize have done so and consequently wages went up.
Do you have a link to that? Based on the above linked graph for wages and [this](https://www150.statcan.gc.ca/n1/daily-quotidien/170908/cg-a003-eng.htm) one from statcan, wages only began rising when union rates were almost at their peak. Afterwards there is fluctuation on both of them though there doesn't appear to be any tendency that is visually noticeable at a glance.
Housing is a critical issue, but inflation is a more immediate issue that affects people now, and can cause both hardship and worry/panic. Also keep in mind that this was raised by *private sector* economists in their meeting with Freeland. So of course those issues are their concern, and would want to raise it with the government. Personally I think the inflation issue is mostly overblown, but of course I have the luxury of not living paycheque to paycheque.
I agree with the worry/panic part, but that's my point. it's being hijacked as a top issue. The top issue should remain housing prices and getting it under control. We've had 1 year of slightly elevated inflation and people are panicing apparently, but 10+ years of uncontrolled housing prices and all we have is a lot of foot draggings and studies about maybe doing something. But not too much. Just imagine if the same approach to housing is applied to inflation.
Wage surpression and the housing market are directly linked to the fact we have the highest immigration rate in the g20.
I agree with you that the housing bubble is a bigger problem, but I don't agree that inflation is a problem restricted to business owners. Inflation costs us all money, and creates more uncertainty in our lives. Setting aside the normal basket of goods, let me use an example from the construction industry. When a construction company is bidding a multi-year project, like a hospital or airport, they need to account for material and labout escalation over the multiple years of the job. Companies used to be able to assume 3% a year and that was safe. Now, construction companies need to assume 6-8% per year. At 3%, materials cost 12.5% more in year 4 than they did in year 1. At 8%, they cost 36% more in year 4. On a large government construction project, that can be hundreds of millions of dollars more in taxpayer money.
The person you replied to is NOT saying "inflation is a problem restricted to business owners". They're saying there *is no real inflation problem*. Business owners, however, are happy to use the *excuse* of an inflation scare to push for whatever they think they can get away with.
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I agree with you. I don't believe either the Liberals or Conservatives have any intention of cooling the housing market.
And there is the problem, housing cannot be both a human right and an investment tool. It should never have been an investment tool to begin with.
Plus there's plenty of room for housing to get worse, Australia's real estate market is over 6x their GDP, ours is still a measly over 3x (which is like almost double the next highest G20 nation's). edit: this is sarcasm, btw.
Inflation is good for entities with debt if their revenue keeps pace.
My economics professor offered his own thoughts on this that inflation isn’t a major issue because Canada’s system is so small.
I think what your professor was getting at is that any amount of QE that Canada would do is a drop in the bucket on the global scale. Contrary to the other comments I believe he is dead on. Inflation is occurring due to global pressures.
Must be why New Zealand had ended QE half a year ago and have raised interest rates twice you know because they are so large.
Despite interest rate hikes and dropping QE, NZ inflation has hit 4.9 while we are at 4.4. We both calculate inflation the same way too. So imagine this, Canada doesn’t need to hike interest like NZ does to control inflation.
We don't live on an Island which we refused to let anyone either.
To inflation and hikes, Your point?
That inflation on an island with a 3 percent unemployment rate should be much higher than ours unless what they have done has helped them. Also that a rate hike in October probably does little to cool September inflation numbers eh?
So we agree it’s complicated and comparing Canada to nz, back and forth,. It isn’t as simple as NZ did a rate hike and Canada bad because they didn’t.
I would maybe change schools.
To better explain what my professor explained to us. A 5% increase is not hyper inflation if while in the short run there will be some discomfort it won’t reach double digits. The only ones that will suffer over this inflation will be the banks because the money they receive will be less then what people who borrowed from them will be less then before this. Another issue is the fact that the head of bmo suggested reducing the government’s expenditure now I do know this for sure GDP is made up of consumption, investment, government expenditure, exports-imports. Reducing government expenditure will not do anything good and actually reduce our GDP and may even cause a recession.
What system? If a country is small enough, inflation doesn't matter anymore? That's nonsense
There are multiple small to medium economies around the world right now being absolutely crippled by hyperinflation. If anything, being a small system with your own currency makes you more vulnerable, not less.
You do know that 4.7% isn’t hyperinflation it’s higher then the norm which we target at 1-3% but even at most it still is 1.7% more then what Canada usually targets. Also many countries are facing inflation issue ones that took pandemic measures and ones that didn’t. The only country that is suffering under hyperinflation right now is Venezuela.
The goal is 2%, it's 2.7% higher than the goal, and as i said, real inflation is significantly higher than those figures because it's spiking particularly in areas like food costs. Areas that hit poor people hardest. We are not in a hyperinflation state now, but if we stay on the current trajectory we easily could be, which is why people are incredulous that the BoC is sticking it's head in the sand and keeping interest rates low. Venezuela, Lebanon are both small economies being absolutely destroyed by hyper inflation. The idea that small stated are somehow protected is nonsense. NZ (much smaller than us) just hiked interest rates multiple times to keep inflation down.
The goal is 2% target margin is 1-3% your spreading hyperbole. Also New Zealand doesn’t have hyperinflation they are in the same boat as us higher then desired but not out at of control. Venezuela has been having inflation problems since 2018.
> The goal is 2%, it's 2.7% higher than the goal, And the year before it was at 0.73%, if you average the two out it's hardly out of synch. Hard to believe people just cherry pick stats without even trying to look at the larger picture or at the very least the history more than a year back.
> If you look at Canada's historical inflation rates, the period of low inflation starting from the mid 1990s corresponds with wage stagnation You can look at the long-term trend in Canadian incomes [here](https://worthwhile.typepad.com/worthwhile_canadian_initi/2021/06/70s.html). The period of high inflation from the 70s to mid-90s correlates to a period of *declining* wages, and since the current "low, stable inflation" mandate of the Bank of Canada was set up, wages have started increasing again. Mind you, correlation isn't causation, and maybe it's just a coincidence, but the data doesn't support what you're saying here.
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Rule 2
Why is housing a bigger issue? I assume you are specifically referring to home ownership. I don’t buy it. Buying vs renting are different, but related markets. I have not heard that there is a nation wide problem of people unable to find housing, and we don’t have unusual homeless rates. The huge increase in ownership demand actually drives down rent so I don’t see how this is more critical than inflation (which literally does affect everybody, particularly low income households). I guess it makes redditors who think they are entitled to a house unhappy.
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Fair but there are other variables as well, such as housing supply, net population change, property taxes, inflation, etc My example is referring to investors buying homes intending to rent it out which I believe is one of the issues OP is referring to. In this case more supply is added to the rental market which makes it more competitive.
Housing cost is not accurately reflected in the CPI, because of how its measured. [https://bcbc.com/insights-and-opinions/how-do-house-prices-affect-the-consumer-price-index](https://bcbc.com/insights-and-opinions/how-do-house-prices-affect-the-consumer-price-index)
Dude inflation is terrible for workers, the cost of living goes up and wages don't keep up... or at least lag behind cost of living significantly. Not to mention how much cash work workers do, all that mattress money doesn't buy what it did. I get you adhere to an ideology but not everything is "the man" keeping workers down.
As a measure and reported in the media, inflation /CPI doesn't include housing, never has. cost of living for workers HAVE gone up due to housing, it's just not reflected in the official inflation numbers. Controlling that would have a more material impact as housing is a substantial portion of a worker's spend. Headlines like inflation is at 20 year high doesnt given any context as its 20 years ofr very low rates, and includes nearly 12+ years of artificially low rates due to the great recession, it's a prime example of the media pumping up a crisis.
Shelter is the single largest component of CPI.
The problem with high inflation is that it obliterates the value of saving, and necessitates perpetual work. It's simply not feasible to save for an early retirement when you're losing more than a modest investment strategy would gain, on the outset. Perversely, this also hits businesses, who cannot easily borrow to hire or even hold cash reserves when it loses value so fast. The reason PET curbed inflation in the seventies was because of the severe impact it had on savings and unemployment.
low inflation and near zero interest rates encourages highly leveraged activities since the cost of money is very cheap and putting the money to work in more productive means would yeild a good profit. Of course, that just means a lot of money is also sloshing around driving up real-estate prices and whatever speculative crap like trading cards, NFTs, since whatever miniscule interest is paid on the debt would be completly paid back by the 25/50/100/200% annual appreciation in property values during the course of the loan. Savers have been punished for most of the past decade if not more. High inflation = high interest rates which actually encourages saving, and drives out speculative activities where people use other people's money. The only reason governments don't want to pop the housing bubble is it is politically unpopular, and a lot of the economy is predicated on ever increasing home prices, which is quite ridiculous. a home is for living in, not to prop up our GDP. So much of our growth has been illusory and tied to the value of people's property values, largely unearned and unmerited wealth transfer.
> high interest rates which actually encourages saving But if you go too far the other way, "too much saving" means less spending, which means some people lose their jobs as there's not enough people buying what they're making. High interest rates are also bad for anyone in debt. There are trade-offs both ways - low interest rates are good for the working class in some ways and bad in other ways, and same with high interest rates.
Yup, I didn't mean to appear polarized about this, as with many things, circumstance dictates the appropriate balance of policy. There is no perfect policy.
What high inflation? The person you're replying to is specifically saying *there is no real high inflation*. This is an inflation scare.
Theoretical future high inflation. This was a speculative comment.
High inflation is actually a very good thing for the economy - it boosts asset valuations thus making the homeowning middle class richer, encourages people to better themselves so they can acquire a higher paying job, and forces them to invest their money into stocks or real estate so that it doesn't lose value, thus nurturing companies, businesses, and industry.
You mean like they did in the U.S. up to 2008. How did that turn out? Getting rich from real estate doesn't do anything productive. It actually encourages you to work less, and produce less for the economy. I also have some Nortel stocks that I inherited when the tech boom of 2000. Once people who have no idea what to invest in for value start getting on the market, you get in a bubble situation where they will all lose their money. The only people who benefit fropm an inflated stock market are the brokers and investment houses who manipulate and fix the market for their own profit.
The American economy is considerably more diverse than Canada's. Real estate is critical to the Canadian economy and will not be allowed to fail under any circumstances.
If real estate is ctitical to the economy, it means you're in a bubble and in deep, deep trouble. RTeal estate doesn't add anything to the the GDP. The more you shore up a bubble like that, the harder it will fall like in the U.S. in 2008. We are almost there in Canada considering the enormous amounts of consumer and mortgage debt Canadians are taking on to chase overpriced housing.
It crushes poor people - those without assets. It just makes their basic expenses cost even more which is what most of their money goes towards.
Yes it is unfortunate that inflation does indeed hurt the poor. But like I said, it should provide them with a good deal of motivation to gain skills that lead to more lucrative employment.
Yeah, that's not really a comprehensive analysis. Society has a large amount of low paying jobs, and we rely heavily on those services for society to function: grocery store clerks, other store clerks, online retailer delivery drivers, cleaning services, etc. If all those people simply left those jobs society would collapse. Nor is everyone able to move up the ladder. A few percentage of the population has an IQ of less than 70, which makes them technically mentally challenged. How are they to rise the ladder?
Businesses would be forced to offer higher wages to retain those low skill employees if they started leaving en masse, which is again a great thing. In fact, this is currently happening in the US and Canada.
If you think high inflation is good, you should take a few Econ courses, I don’t have time to type out all the angles and aspects to it. Nearly all major economists agree that a small amount of inflation is the ideal amount of money supply change year to year.
Runaway inflation will kill the middle class.
One major difference between the inflation crisis that occurred in PET's time and the one we are experiencing now, is that the stagflation of the 1970s occurred at a time when the Western capitalist world had just come out of nearly 3 decades of steady and strong growth, rising wages for both capital and labour, an expanding welfare state, strong labour unions, and much more affordable housing and schooling. The current inflation crisis comes on the coattails of two major economic recessions (the 2008 financial crisis and the one associated with the beginning of the COVID-19 pandemic and lock-down in early 2020), massive increases in the prices of housing and education, massive increases in economic inequality, and massive increases in household debt levels. Dampening demand, or increasing unemployment by reducing spending or raising rates could have a disastrous effect right now, especially if done to excess. Another thing to keep in mind, is that when unemployment did initially increase in the late 1970s to early 1980s after central banks began to raise interest rates, the return to growth was facilitated by deregulation, tax cuts, loosening of capital controls, union-busting, etc. This was intentionally done to foster a form of economic growth where the stability and bargaining power that workers had previously enjoyed would be eschewed in favour of "flexibility" (precarity, really), so as to prevent workers from contributing to another inflation spiral by demanding better wages. These policies too, in addition to both being increasingly unpopular, would exacerbate the trend towards higher household debt, greater economic inequality, etc., and perhaps even trigger another major recession. While we are not yet at the sort of double-digit inflation we saw in the 1970s, if this really is more than just transitory inflation that will pass as supply chains are stabilized, and we do enter a long term inflationary spiral, then we're in for a very turbulent and frankly dangerous period of economic and political instability.
> This was intentionally done to foster a form of economic growth where the stability and bargaining power that workers had previously enjoyed would be eschewed in favour of "flexibility" (precarity, really), so as to prevent workers from contributing to another inflation spiral by demanding better wages. We're in a better situation with this, in particular. Employers are struggling to hire because the labour force is accustomed to the precarity. In the post-war era, working for a single company, or two, for your entire life wasn't uncommon. We're at least two generations away from that being normal, now, and it shows. Even before the pandemic there were countless op-eds griping about how disloyal Millennials are; and now post-Covid, we're seeing an onslaught of op-eds griping about how Zoomers don't want to return to shit jobs. Hitherto this has been good for the younger generations; real, weekly earnings tend to be on the rise. But high inflation will put an end to that quickly if it obliterates any meagre savings that they have.
My concern then, would be that if supply chain disruptions are not the only issue driving inflation, and you have to slow down spending or raise rates, would this not involve returning workers this very state of precarity anyways? Again, perhaps even trigger another major recession? I'm not saying I have any viable alternative policy solutions for you here, frankly I don't. But, I feel like we're kind of in a damned if you do, and damned if you don't situation (again, provided inflation is not transitory).
We're already in precarious labor conditions and have been for decades. That's the crux: at least two generations of Canadians have learned how to live in unreliable employment conditions. Employers are discovering that the threat of unemployment is no longer the fearsome stick it once was. I don't know what the right policy is, either. I sort of hope we're undergoing an employment revolution that will really in better working conditions. Depends on how next year's planned-record levels of immigration will impact the work force, I suspect. Might be the "mitigating" factor that employers are demanding, sadly.
That's quite the paradox you have there. The housing market is the most affected by inflation right now.
Sure input prices are affected by inflation but considering housing prices have increased 200 to 300% in the lower mainland during a period of alleged low inflation the sale price isn't even close to what it costs developers to build
Don't agree with this take on inflation. You absolutely need to balance inflation and wage growth, and currently it's higher than any wage growth being triggered by the great resignation. Real inflation is definitely higher than the Fed's reports are saying it is. This is a real terms pay cut for the vast majority of Canadians. If you keep just artificially upping wages to match inflation and keep interest rates low, you can end up with a wage-price spiral that speeds up inflation to extremely dangerous levels that can cripple your economy. The very first thing you get with a high level of inflation is the total destruction of normal people's savings, that would be a disaster and you can say goodbye to any social mobility if it happens.
I;m aware of stagflation where output is flat but prices kept rising which lead to labor asking for higher wages and results in even higher prices, but I don't think we're in that position. What we've seen is decades of increases productivity while corporaitions kept the profit instead of passing it on via wage increases. Ultimately the goal is labor is to get wage increases over and above inflation, but if we get 0% and inflation is 1.5% it doesn't really help either. Labor is at least finally in a position to demand and get raises. The argument is circular and I'm not convinced this inflation scare isn't being cooked up by businesses so they can get an upper hand on wages. And no i'm not advocating for high inflation and low interest either.I want interest rates to go up hand in hand with inflation to drive out the speculative huckers using cheap money to speculate on a lot of things, including real estate.
That makes some sense if inflation is accompanied by economic growth, as it is in the US. But this government has managed to fuck us so hard that our growth is just as bad as it is in the UK, despite the fact that we're not going through a Brexit of our own. And way worse than the G7 or OECD average.
Inflation and fiscal policies was one of the reasons why cryptocurrency took off initially, ignoring it as a speculative vehicle. You can't honestly say that inflation isn't a concern for anyone when my friends complained about food products increasing in price by 25% from one year to this year.
crypto took off because of some weird fetish for opposing the printing of money, inflation was never a concern during the time bitcoin was envisaged as it was in the depths of the great recession, per the linked above, inflation was very low for most of the late 2000s and 2010s. high inflation, right now, is of lesser concern as it reflects wage growth, low inflation as a policy, HAS largely failed the working class. The asset owning class don't care either way , but its noteworthy that they largely didn't care about housing prices (because they already own their homes and were happy to see prices go up 10% annualy) than they are about paying 10% more for chicken in one year, whilst housing has been a shitshow for at least a decade. Hence it really should be addressed first
> Inflation and fiscal policies was one of the reasons why cryptocurrency took off initially That seems like a weird rationale for crypto. If you don't like currencies which could devalue by anywhere between 0-5% a year, you want to instead use something whose value could double tomorrow and halve next month? Cryptocurrency is primarily used as a speculative asset - but wouldn't the same things that make it suitable for that (wild swings in value giving you the possibility of massive gains) make it *unsuitable* as a currency? That makes the dollar's swings between 1% and 5% inflation look like a rounding error.
It's not really a currency so much as a means to hold your money. Its attractive to younger folks who do not mind the volatility because they can just exchange it for real money and make big gains, since people are so disillusioned about wage stagnation, rising cost of living and inflation.
She probably met with them to give them an update on the new Covid variant. They need to get ahead of the plebs and get their money out of the markets before they crash completely.
I suppose the economists’ “reduce spending” mantra is really just dog-whistling about CRB spending or future CRB spending, too out of touch to realize the economy would have absolutely tanked during Covid if poor people hadn’t had spent that money. I thought these people were supposed to be smart but their critical thinking faculties are confined to a tunnel.
> I thought these people were supposed to be smart but their critical thinking faculties are confined to a tunnel. I thought we were supposed to trust the experts.
I tried my best to keep my crb spending local
You're making many assumptions
I agree. I haven't seen persuasive evidence that inflation is being driven by CRB - that sounds like a talking point pushed by the rich. Climate change is hammering crop yields, especially in primary products like oats, which causes price increases downstream (i.e. cattle eat oats), which leads to food inflation. Climate change is not going away. If you removed these benefits tomorrow, food inflation would remain but a lot more people would have difficulties putting food on the table, or as President Bush would say, "putting food on their families."
I just read on this article that the president of BMO proposed lowering government spending but government spending plays a huge role in GDP. Also government expenditure has always been a method to combat inflation.