As expected, talk of the cost of living crept up again online today, with some more hyperbolic nonsense coming from one of our favourite Conservative talking heads. But this time, economist Stephen Gordon stepped in to provide a reality check – only to find more StatsCan “truthers” coming out of the woodwork. Remember, for populists, they don’t like data that contradicts their narratives, so they try to insist that the data is somehow biased or wrong. Gordon sets them straight, and makes the even more salient point that if the Conservatives (and by extension the NDP) are so concerned about cost of living increases that are within the rate of inflation, then perhaps they need to articulate what their monetary policy goals are – which is what the targeted rate of inflation amounts to. Plenty to think about and remember here.
All of those things are in the Consumer Price Index. The CPI is *designed* to measure the cost of living. If you have a better index, let's see it. https://t.co/kzIMBLWH47
— Stephen Gordon (@stephenfgordon) July 30, 2019
I think I'm going to bang this drum for a while. If the CPC thinks that CPI inflation understates increases in the cost of living, what mandate would they give the Bank of Canada? Because obviously they think the Bank is aiming at the wrong target https://t.co/HduoK46ZDl
— Stephen Gordon (@stephenfgordon) July 30, 2019
If the CPC thinks that the 'cost of living' has grown faster than the CPI, and that monetary policy should reflect that, then they must think monetary policy has been too loose. https://t.co/REuHwbADdb
— Stephen Gordon (@stephenfgordon) July 30, 2019
Controlling the growth of the cost of living is the Bank of Canada's job. And apparently you don't think that they've been hawkish enough. https://t.co/TQjqgGEmBp
— Stephen Gordon (@stephenfgordon) July 30, 2019
Debt loads are high because interest rates have been low. You're developing a remarkably coherent case for a more hawkish monetary policy than what we've had for the past 25 years. https://t.co/R9bH4Sfeul
— Stephen Gordon (@stephenfgordon) July 30, 2019
I can't think of the last time when a party built its messaging around the theme that monetary policy had been too lax, but that's where the CPC is going.
— Stephen Gordon (@stephenfgordon) July 30, 2019
Free question for journalists: The Bank of Canada's mandate is up for renewal in 2021. Given the CPC's concern about how the 'true' cost of living isn't reflected in the CPI, what mandate would a CPC govt give the Bank? Why?
— Stephen Gordon (@stephenfgordon) July 30, 2019
But the point is that if you're complaining about the cost of living rising too fast, then you're complaining about a monetary policy stance that hasn't been tight enough.
— Stephen Gordon (@stephenfgordon) July 30, 2019