By Henry McRandall
When woefully compromised Bank of Canada governor Stephen Poloz hinted today that the country’s central bank would likely start jacking up interest rates next week, his sloppy announcement revealed not only that he is totally out of touch with the financial reality the masses are struggling against but also that his sole interest as controller of Canada’s monetary policy is in protecting the vested interests of the Top1%, of which he is a part – in gross violation of his mandate and the mandate of the Bank of Canada.
Poloz justified next week’s likely hike in interest rates with the assertion that his failure to do so at this time might risk causing a spike in inflation at some undetermined future time. His assertion was specious and fails even on its face not only as a justification for the threatened rate hike but also as a possible rationalization for his obvious abdication from the DUAL mandate of the Bank of Canada.
The Bank of Canada, as Canada’s central bank, is a quasi-public, quasi-private entity that serves no other real purpose than to turn over to the 5 big private-sector Canadian banks near total control of monetary policy, including the setting of key interest rates and controlling the money supply. It’s simply yet another sop to the Ownership Class or Top1%
to enable the holders of illicit and grossly under-taxed private wealth to exert even greater anti-democratic control of the Canadian economy.its mandate is to maintain a healthy balance between two major but competing factors in the overall economic equation – inflation and unemployment.
At a time of high unemployment, a central bank typically reduces key interest rates and increases the money supply to allegedly enable the private sector to create jobs. And at a time of high inflation, a central bank – historically – has typically raised interest rates and reduced the money supply to slow down “over-heated” economic growth by discouraging companies from borrowing money to finance ongoing growth and job-creation.
Obviously, the lower a country’s unemployment rate is, the more power or leverage workers have in seeking higher wages, better employee benefits and perhaps even – God forbid! – an employer pension plan – because low unemployment forces employers to compete with other employers for workers with any particular set of skills. When the country’s unemployment rate is high, workers lose all their leverage because there is less employer competition and a larger pool of unemployed workers from which employers can hire.
This simple formula tended to be fairly innocuous for many years because there was a predictable and reliable pattern to the boom-and-bust cycle of market-driven corporate-capitalist economies. Every economic downturn was typically followed by an economic upturn long enough in duration to allow the working class to largely recover from the financial damage inflicted upon them by the downturn.
But in recent decades – basically over the course of the 35 years since the unholy trinity of RWNJ Ronald Reagan, UK’s Iron Witch Margaret Thatcher and their Canadian lapdog Brian Mulroney began inflicting neoliberal/neoconservative trickle-down treachery upon the masses of the entire world – the historic pattern of the boom-and-bust cycle was irreparably broken. The economic downturns began to become much more sever and much longer in duration and the ensuing upturns began to become much weaker and much shorter than in the past.
With much less chance to recover financially, working-class and even many middle-class households began having to borrow more and jack up their own indebtedness just to be able to tread economic water. While the Top1% – the Ownership Class – has recovered marvellously well from the global economic crisis caused by the unprosecuted felony mortgage frauds perpetrated by the gangster banksters a decade or so ago, there has been virtually no real recovery at all for the Other99%.
And for Bank of Canada governor Stephen Poloz to now suggest that it may be time to jack up key interest rates and put the brakes of economic growth – even when unemployment and underemployment have remained staggeringly high for decades, when there has been no real growth in wages for rank-and-file frontline workers in decades, when consumer debt in Canada has risen to record and uncharted levels – reveals irrefutably that Poloz and the Bank of Canada are no longer interested in sustaining a viable and relatively healthy balance between inflation and unemployment – as the central bank’s dual mandate requires it to do – but have now decided to commit themselves solely to the illicit vested interests of a pampered Ownership Class – the billionaires and mega-millionaires – at great and oftentimes devastating cost to everyone else.
Stephen Poloz has forfeited the moral authority to steer Canada’s central bank. And the gangster banksters of the private sector have forfeited the moral authority to control Canada’s central bank. There is no sound economic rationale for extremely wealthy private-sector gangster banksters to control Canadian interest rates or Canada’s money supply. Every function now performed by the Bank of Canada could just as legitimately and just as competently and much more democratically be performed by Canada’s elected and accountable federal government and the civil service which – unlike the pro-Establishment bean counters at the Bank of Canada – is accountable to an elected government that is, at least nominally, accountable to voters.
It’s time to take control of Canada’s economy out of the hands of the un-elected holders of largely illicit and massively under-taxed private wealth and give it back to Canadians as a whole by abolishing the Bank of Canada and sending Stephen Poloz to wander off into the sunset now so polluted by the criminal Establishment whose vested interests he seems exclusively committed to serving.
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