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Trudeau

the Education of a Prime Minister
Oct 10, 2019baldand rated this title 2 out of 5 stars
Regrettably, Ivison shows not the slightest interest in monetary policy in this tome. He makes no mention of the 2016 renewal of the inflation control agreement that Trudeau’s Finance Minister signed with Governor Poloz, absolutely the worst such agreement since they started in 1993. It was the first such agreement ever to raise the target “true” inflation rate, pushing it up to 1.7% from 1.5% by the Bank of Canada’s estimate. Trudeau didn’t campaign in 2015 on a policy of higher inflation, but his government negotiated a higher "true" inflation target. The same agreement also plutoed the Bank of Canada’s operational guide, CPIX, which excludes the mortgage interest cost index, replacing it by a trio of core measures, none of which explicitly excludes mortgage interest, and one of which, CPI-common, is quite heavily weighted towards it. The Bank of Canada is now the only central bank in the world whose preferred measure of core inflation is sensitive to mortgage rate changes. Ivison also makes no mention that when Trudeau caved to virtually all of Trump's demands in the final days of negotiations on USMCA, he agreed to a Chapter 33 on Macroeconomic Policies and Exchange Rate Matters, establishing a Macroeconomic Committee to prevent currency wars. This clause, unprecedented in previous US trade agreements, potentially amounts to a serious loss of Canadian sovereignty over its own monetary policy. (On the positive side, with the Bank of Canada signalling it may want to move to a much higher target rate of inflation in 2021, this may not be a bad thing, as the Americans would not take a positive view of this. Ivison doesn’t ignore fiscal policy as he does monetary policy, but there are problems with his narrative. He writes: “As the transition team discovered when they came to power, the books were $12 billion worse than anticipated in the spring budget, so none of the parties would have managed to balance the books in 2015-16 without cutting costs to the bone.” Sure, now pull the other leg. This is ascribed to a confidential source, which seems to have been a problem with the entire book. Ivison spoke to his Liberal confidential sources and wrote down what they said as if it were Holy Writ, never even bothering to check what they said against government releases. The Conservative 2015 budget had forecast a $1.0B surplus for 2015-16. The PBO forecast a $0.7B surplus as late as April 2016, after the fiscal year had ended, and the actual estimate turned out to be a $1.0B deficit. The PBO attributed this to $3.9B in new tax and spending measures by the Liberals, without which there would have been a $2.9B surplus. Trudeau’s Finance Minister Bill Morneau was projecting a much higher deficit for 2015-16 than finally emerged, even as the Fiscal Monitor was showing large part-year surpluses and the PBO was forecasting a surplus. Ivison makes no mention of a truly shameful episode in Question Period where Trudeau was asked repeatedly to justify his Finance Minister’s deficit forecast against the healthy surplus for the year 2015-16 in the Fiscal Monitor. All he had to do was read bullet points at the top of the Fiscal Monitor release to provide some justification for the improbable Finance Department forecast but he was too dim-witted even to do that. Instead he simply repeated economic bullets points from his 2015 election campaign, taking a victory lap as it were. The book was published before the blackface photos and videos emerged of Trudeau. Since one of the photos of Trudeau as Aladdin in blackface actually was published twice by the West Point Grey Academy in Vancouver where Trudeau was teaching one wonders why Ivison never saw it and reported on it.