Harper's economic policies are in my view an unmitigated disaster over the full run of his term in office. Let me explain because it affects everyone of whatever political persuasion. Its also a direct consequence of George Bush's Economic Legacy in America.
One of the little talked about consequences of the crisis of 2008 is why economies are presently so sluggish, especially those advanced economies such as Canada. My meta analysis comes from years of advising banks and countries on economic issues and examination of what has happened since the financial meltdown and its consequences for Canadians, Brits and Americans. This is country neutral analysis that should be obvious to all, but continues to be an explanation of dynamic forces acting out bad policies in economic management. Its all in the mathematics of how economies work against large segments of their populations.
If you examine a consuming household budget you will see that generally during recessions purchases of large items such as houses and cars are deferred because nominal incomes don't support them. A pick up in the economy occurs when demand for land for housebuilding, housebuilding and homes rises. The pickup should linked in a meaningful way to rises in domestic incomes from salaries, profits and interest. But, what happens when the links are broken. What happens when the value of land bears little or no relationship to the movement of domestic incomes?
Suppose that you are a speculator, condominium builder, high rise constructor, or city home builder and you see the value of your land constant over time. What policies will you urge your central bank to implement? Why does very bad economics result?
What should be obvious to you, but is little talked about?
To be continued ...
Arthur Lake
"We often know more than we can tell .." MIchael Polanyi
"We 'always' know more than we can tell .." Arthur Lake
