Pierre Poilievre was obviously surprised that it was so easy to beat up on the Bank of Canada.
Now, every time he takes it up a notch, it sparks a reaction from experts and leading economic figures. And that’s what Mr. Poilievre wants.
His latest step, promising during Wednesday night’s Conservative leadership debate to fire the Governor of the Bank of Canada, Tiff Macklem, isn’t going to do anything to bring down inflation. But that’s not the point.
The goal is to attack the experts, the “elites,” the “gatekeepers” – to channel the anger that many in the country feel, and the frustration propelling Mr. Poilievre’s candidacy. Inflation is a powerful political issue, but it’s a lot more useful to Mr. Poilievre when it is a cudgel wielded against culprits painted as one big ivory-tower elite.
Of course, Mr. Poilievre knows that politicizing the Bank of Canada, eroding its independence, poses a danger. He himself lectures crowds at his rallies about it.
He argues that politicians are always tempted to interfere with monetary policy, and claims that Mr. Trudeau’s Liberals have already done so by enlisting the Bank of Canada to adopt loose-money policies that spurred inflation.
And it should be obvious that if campaigning politicians turn the central bank’s top job into The Apprentice, seeking to win votes by declaring who will be fired and hired, then that independence will be at risk.
But it turns out that the Bank of Canada makes a great political target. Its workings seem mysterious. To most people, its leaders are faceless bankers and bureaucrats.
The former governor, David Dodge, responded to Mr. Poilievre’s charge that the Bank of Canada’s leaders are “financially illiterate” by saying it was “bullshit.” Mr. Poilievre gleefully tweeted that Mr. Dodge’s remark “proves the elites are freaking out,” and people should “take control of money from politicians and bankers.”
It was like shooting fish in a barrel. Even Mr. Poilievre seems to have been surprised by how easy it was.
Six months ago, he was still tiptoeing up to it. He argued that the Bank of Canada had “printed money” – a policy of “quantitative easing” that in fact consists of buying government bonds – to fund the Trudeau government’s pandemic deficits and caused inflation. But he still insisted that he was not criticizing the conduct of monetary policy. Politicizing monetary policy is usually treated as a no-no.
But Mr. Poilievre crossed that line in the leadership race. With every swelling crowd at every rally eating up his criticisms, he raised the bar.
On Wednesday, the Ottawa MP went into the debate on a calculated mission to take it to the next level, by pledging he would fire the Governor. Jean Charest criticized him by saying that Conservatives don’t undermine Canada’s institutions, but Mr. Poilievre knows there’s a section of the country that wants him to knock institutions around. He’s probably pleased with the outrage now.
He’s not the first politician to criticize a central banker. A clash between John Diefenbaker’s government and then-governor James Coyne in 1961 helped confirm the principle of independence. In opposition, Jean Chrétien, criticized governor John Crow for his high-interest-rate inflation-control policies; Mr. Crow served out the last few months of his term after Mr. Chrétien took power.
But that just shows politicians are tempted to interfere.
It’s fine to argue that the Bank of Canada got things wrong. Its quantitative easing was intended to stave off economic collapse in a pandemic, but there are plenty of folks who think the bank took it too far.
If Mr. Poilievre wants to change the bank’s mandate to ban quantitative easing, then right or wrong, it is a policy question.
It’s worth noting, however, that it won’t do much about inflation right now, because the Bank of Canada’s QE program has already ended.
But campaigning on a promise to fire the Governor of the Bank of Canada – that sounds strong. And it’s a whole new level of politicization.
To begin with, the replacement’s independence would be impugned. If it becomes accepted practice, we can have Conservatives campaigning for one candidate for the central bank, and Liberals for another, promising low interest rates or a high dollar to get elected. That’s a recipe for instability.
Mr. Poilievre must know that. But he’s riding a wave of outrage about inflation and Ottawa and politicians and bankers to the Conservative leadership. And campaigning against the central bank has just been so easy.
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