Wednesday, December 15, 2010

Peter Foster zaps Mark Carney

Peter Foster:

On Monday, Bank of Canada governor Mark Carney issued another “stern warning” about record levels of household debt. But isn’t that a bit like Eliot Spitzer giving a stern warning about public morality?

... Mr. Carney did a nice job ... of trying to slough off the blame. “The responsibility,” he said, “obviously starts with the individual, it extends to the financial institutions, and then we as policymakers need to ensure that a suite of policies are appropriate to ensure sustainable growth.”

... That has it upside down. What actually happens is that government policy interferes with markets and imposes regulations that control the behaviour of the financial institutions, which in turn influence the conditions under which borrowers act.

... with all due respect to Mr. Carney, while he likes to talk as if he is an aspiring coach of Economic Team Canada, his actual job equates neither to coaching nor managing, nor dashing down the ice scoring goals, nor even being ... goalie ... . Although the economy is not a game of hockey, if it were, Mr. Carney would be the Zamboni -driver. His official job of keeping inflation in check equates to keeping the ice flat so the economic players can do their thing. Leave the economic policy to Don Cherry.
Ouch! I bet that smarts!

Hilarious, but too true. Read it all.


Blame Crash said...

Sorry, but Carney has it right when he says it’s about individual responsibility.

I’m not making that call based on my political ideology but on the many people that I know and am acquainted with.

The “me” generation is alive and well and is fashionably spending itself into economic servitude. It’s almost like these people don’t know how to add and subtract, or think. Their attitude is “Oh well. I’ll just claim bankruptcy and let everyone else pay for what I obviously deserve”

I’ve seen it to many times to believe that “society is to blame” or Mark Carney for that matter.

JR said...

Oh, no doubt individual responsibility has a part to play. But Carney can't claim that people don't respond to incentives. In fact he relies on it. It's the basis for his anti-inflation policies. When things go down in price the more people will buy. As Foster says, that's also true of money - the cheaper it is, the more people will borrow. I think Carney is playing a game of "I warned you, if things go wrong it's not my fault." It has CYA written all over it.