In attack on bank, Poilievre knows anything goes
CONSERVATIVE LEADERSHIP RACE
It’s not that people don’t enjoy watching bankers get upset: It’s a subplot in several major movies. In a Conservative leadership campaign defined by convoy praise and high school debate club burns, Pierre Poilievre also takes time to attack the Bank of Canada. Sunday, former bank governor David Dodge responded, “well that’s bulls--” on a national talk show. You don’t see that every day.
Maybe you will, though. The Ottawa-Carleton MP seems to be leading the Conservative leadership race thanks in part to predatory, distorted attacks on institutions during a time of global uncertainty. The Bank of Canada is a target thanks to the rise of inflation, which is largely due to the war in Ukraine and oil prices, house prices, China and COVID, and maybe some profiteering. People notice pocketbook economics.
In response to this thorny global financial challenge, Poilievre blames domestic spending and bank bond-buying to support government deficit spending — he has always been against the pandemic financial supports to Canadians — and pitches … bitcoin? That attack on the bank came after its research showed five per cent of Canadians owned bitcoin between 2018 and 2020: mostly young men whom the bank described as having low financial literacy. Pierre, courting such young men, shot back that the bank was financially illiterate. Poilievre has also pitched Canada as a global cryptocurrency leader, proposed banning a government version, and has sold bitcoin as a way to opt out of inflation.
Which makes economists look at Poilievre the way a plumber would look at your plan to build a cardboard toilet: befuddlement, rising to annoyance. Bitcoin as a watchword for sound money is more or less the gold standard rebranded, and former Bank of Canada governor Stephen Poloz has already noted that a fixed money standard historically raises the risk of deflation and depressions.
But who listens to experts, am I right? Maybe you could view Poilievre’s bitcoin pitch simply as the broader trend of hawking crypto: buy bitcoin, make lots of money, opt out of inflation, the dream.
He’s like Matt Damon telling people that fortune favours the brave so he can afford a new boat or something.
But bitcoin is down 50 per cent since November as part of a greater cryptocurrency slump, and one estimate had 40 per cent of its holders as being underwater. It might go up again. But it’s not stable.
His attacks on the Bank of Canada are similarly reckless. He wants the bank to focus on keeping inflation as low as possible, while knowingly pushing lines of attack that could undermine its ability to do so. Expectations of inflation affect wage expectations, which affect prices, and if the market doesn’t think the Bank of Canada is serious about bringing down inflation, inflation doesn’t slow.
Maybe Poilievre truly doesn’t understand that. More likely, he just doesn’t care.
“It’s easier to meet your target if people think you’re going to meet your target,” says University of Calgary economist Trevor Tombe. “If they don’t think you’re going to meet your target, then you have to lean against them a lot harder, and that means higher interest rates, lower economic growth, higher unemployment. And the bank will do it, (if necessary).
“It’s not new for politicians to oversimplify complex problems. I mean, that is their go-to strategy. I think what makes this dangerous is that it is aiming to undermine important economic institutions in the country.”
Everything’s easier if you don’t worry about consequences, though.
And when your idea of freedom includes the convoy, it’s easier still.
Jessica Marin Davis is the president of Insight Threat Intelligence, a former senior strategist in Canadian intelligence, and the author of a book on international terrorist financing. She points out that of the money sent to the Ottawa convoy, the vast majority of the million or so via crowdfunding sites was frozen, leaving approximately $30,000. But over $830,000 came in via cryptocurrency.
“With the crypto, we do know that there were some high-profile donations, but the problem is a lot of the donations were done from wallets that were not attributed to individuals, so we just simply don’t know,” Davis says. She’s not anti-crypto, per se: She points to its utility in moving money across borders.
“On the other hand,” Davis says, “it’s super useful for money laundering, and it’s super useful for other forms of illicit financing, and it’s somewhat useful for terrorist financing. And I would say it’s somewhat useful for other forms, like financing criminal mischief, as we saw in the convoy.”
Really, the simplest throughline to Poilievre’s bit is that if your goal is to hammer freedom to an audience that found wearing masks was an imposition, that vaccines were a conspiracy rather than a collective victory, and that are angry or confused by what’s happening with the world, then bitcoin is just another aspirational buzzword that signifies the world doesn’t have to work the way you’re told it does.
Poilievre has been pumping conspiratorial theories about gatekeepers for much of the pandemic. He’s still doing it. He’ll say just about anything, and that opens the door to all kinds of conspiracies, all kinds of anger, all kinds of extremism.
Which in a world riven by complex problems is indeed reckless, and even, in the words of at least one distinguished former chief banker, bulls--. But there seems to be a market for that, these days.