There may be worse papers than the Toronto Star when it comes to economics reporting, but since it's the one I'm most likely to read, it's the one that gets most on my nerves. The Bank of Canada raised its target rate for the fourth time in a row last Tuesday (here's why), and the TorStar's response was to print an opinion piece that is a painful mix of ignorance, intellectual sloth and all-round stupidity. The article in question is here; don't say I didn't warn you.
The argument - such as it is - seems to be constructed around the following points:
- Inflation only bothers rich people, so an anti-inflation policy is just another case of The Man's Brutalisation of Ordinary People. ("Canadians exist to be laid off when inflation is deemed to be too high by the investment industry.") The only support for this claim is the (unsupported) assertion of some labour leader. A quick google search of the literature (an exercise that is apparently not worth five minutes of Jefferey Ewener's time) suggests that there's not much in the way of convincing evidence about the distributional effects of inflation one way or the other, but what evidence there is suggests that low-income households are hit harder than higher-income households. Higher-income households have greater access to financial instruments that can protect them from inflation, while lower-income households - whose assets almost entirely consist of cash used to make purchases - are more vulnerable. (An example from the literature.)
- Systematically lower inflation leads to systematically higher unemployment. ("John Crow was responsible for wiping out maybe half a million good, high-paying jobs.") The simple fact that a commentator could - some forty years after the development of the Friedman-Phelps model of the expectations-augmented Phillips curve - manage to get this sort of bilge published in the highest-selling newspaper in the largest city of a G7 country is amazing in itself.
There's nothing wrong with proposing a coherent, contrarian viewpoint. But TorStar's readers deserve better than sloppy, anti-intellectual, rants.