Roundup: A primer on inflation calculation

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Bank of Canada governor Tiff Macklem testified at the Commons finance committee earlier in the week, and a whole lot of people, including a certain “Food Professor” charlatan and numerous Conservative MPs, demonstrated that they don’t understand math or inflation as they all misconstrued the numbers that Macklem gave. And they’re the same number he has given before—that the carbon price has had a 0.15% effect on inflation, and if you removed it, going from $65/tonne to 0, it would have a temporary effect of reducing inflation by 0.6%.

A whole bunch of people–said charlatan, those MPs—insisted that because 0.6% is 16 percent of the 3.8% of headline inflation, that it means that the carbon price is responsible for 16% of inflation, which is wrong and not how inflation is calculated. Removing it wouldn’t actually mean inflation would go from 3.8% to 3.2% because the carbon price is not driving it. Energy and food prices are doing a lot of the driving there (and food prices are being hugely affected by climate change), and even if it did move to 3.2%, the Bank isn’t going to start lowering interest rates until it reaches the two percent target. Essentially, you’d be killing the carbon price and undoing the work it’s doing to lower emissions on the basis of a bad lie that it has made life unaffordable.

Meanwhile, here’s economist Stephen Gordon breaking down how inflation is calculated, with the inevitable conclusion that the carbon price is just noise—it’s not driving inflation, and it’s better to focus on the things that are.

A threat to democracy

A bunch of people got the vapours yesterday when Mark Miller called Pierre Poilievre a threat to democracy. Apparently these same people have convenient amnesia, or wishful thinking that he’s only kidding in what he’s doing and saying, because nobody learned a gods damned lesson from the Trump years.

Ukraine Dispatch:

While rallying Ukrainian troops, president Volodymyr Zelenskyy counselled patience and not to expect instant success (the latter comment directed primarily toward Western allies). A UN report says that 40 percent of Ukrainians need humanitarian support as a result of the conditions brought about by Russia’s invasion.

https://twitter.com/ukraine_world/status/1719348496640200777

Good reads:

  • Justin Trudeau says that there will “absolutely not” be any further carveouts of the carbon price after the “pause” for home heating oil.
  • Trudeau appointed five new senators for Nova Scotia and New Brunswick including former long-time Liberal MP Rodger Cuzner.
  • Trudeau will be headed to Washington on Friday as part of a meeting about greater economic integration across the Western Hemisphere.
  • Chrystia Freeland will be meeting with her provincial counterparts later this week on the subject of the CPP and Alberta’s cockamamie plan to (maybe) pull out of it.
  • François-Philippe Champagne was in London representing Canada at the AI Safety Summit there, touting our incoming AI legislation.
  • Mark Miller will be laying out new ways the government plans to better align its immigration targets with needs on the ground.
  • Canada joined the US and the UK in applying sanctions to Myanmar’s military regime as well as those connected to it.
  • Immigration officials are calling on would-be Afghan migrants waiting in Pakistan to reach out to the High Commission there if they are detained.
  • The 22 Indigenous police forces in Quebec have launched a complaint to the Canadian Human Rights Commission of chronic federal underfunding.
  • A third First Nation wants to be included in the co-management of Jasper National Park, saying that they were evicted from the land by the RMCP.
  • The US Ambassador to Canada is warning of a “big fight” if Canada moves ahead with the Digital Services Tax (which, again, is a failsafe if the OECD can’t agree).
  • The CBC has done an analysis of how much more expensive heating oil is, even without carbon pricing, compared to all other forms.
  • The Cameron Ortis trial heard from his former supervisor about how the information he allegedly leaked could get an undercover operative killed.
  • The BC government is committing to mandatory Holocaust education for all grade 10 students in the province.
  • Althia Raj hears the howls of disappointment from Trudeau’s allies for the heating oil “pause,” and what it does for his climate plan’s credibility.
  • Glen McGregor has an interesting tale of how the prime minister’s plane used to carry its own blood plasma supply aboard.
  • My column looks at how the Conservatives are worldbuilding a dystopian alternate reality, attacking media and institutions in the process of creating their reality.

Odds and ends:

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One thought on “Roundup: A primer on inflation calculation”

  1. Excellent analysis as usual, Dale. I look to you for truth telling.
    Also it is great to see Supriya back in action after a challenging time.

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