FP Comment’s 2022 scrapbook: January—February

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Mining’s new Middle East

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Latin America’s market share of lithium and copper reserves is OPEC-like in size. If the countries ever tried to create a cartel, they would benefit from co-operation with China and Russia to strengthen their control of market prices. Together, Latin America, Russia and China control almost two-thirds of world lithium reserves, 50 per cent of copper, 46 per cent of graphite and 65 per cent of rare earth metals… Maybe a cartel won’t happen but Chinese and Russian economic and political interests in Latin America won’t go away. In its push for electrification of energy, the U.S. will discover it has opened a new opportunity for its rivals to exploit their market power in mining. That’s the risk when energy supply is put in one basket. Jack Mintz, Jan. 6.

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Follow the money

Monday was a very busy Valentine’s Day for Prime Minister Justin Trudeau and his Liberal government, and not just because of his big-hair news announcement that the government planned to use the 1988 federal Emergencies Act to shut down the law-breaking trucker convoys, nor because Finance Minister Chrystia Freeland announced a precedent-setting plan to force the banks to use the act’s anti-money laundering and anti-terrorism clauses to track down and stop the flow of illegal funding that supposedly feeds the convoy protests and is costing the Canadian economy billions. The objective, said Freeland, is to “follow the money” that is flowing into the economy-destroying blockades. From now on, Canada’s banking and regulatory infrastructure — known as FINTRAC — will allegedly monitor the mighty swells of funds streaming into the country via internet-based fundraising organizations.

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When it comes to the money, however, there are bigger trails to follow. Maybe FINTRAC could put its dollar-tracking skills to work on another Valentine’s Day announcement from Ottawa, a story buried (deliberately?) by the Emergencies Act development. In St. John’s, N.L., the provincial and federal governments formally signed the “term sheets” for another federal loan guarantee on the disastrous Muskrat Falls hydroelectric power and transmission project. Originally priced at $6 billion in 2012, the project is still not complete and the cost has soared to $13.1 billion and is expected to go higher still. Terence Corcoran, Feb. 16.

It’s the tow trucks, stupid

My bet is the real reason the government has invoked the Emergencies Act is the tow trucks. The authorities apparently were ready to start removing the big rigs from downtown Ottawa but private tow-truckers declined to participate. Maybe because they thought it would be a risky undertaking: they of all people would understand the fierce attachment of truckers to their trucks. Or maybe it was because they’re truckers, too, and therefore independent-minded and unwilling to help remove kindred spirits. Who knows why? Their motivation doesn’t really matter, does it? It’s a free country. Or it was.

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In some respects, it’s charming that the government doesn’t have a fleet of its own tow trucks at the ready. Though not surprising. The federal government has awful trouble outfitting itself with equipment, whether ice-breakers, submarines, fighter jets or even functioning payroll software. You can see how tow trucks might befuddle it, too. William Watson, Feb. 17.

Modern monetary fantasies

It would not be the first time central banks overreacted with excess stimulation based on uncertain monetary policy. About 50 years ago, OPEC launched an oil embargo that led to a tripling of the world oil price. Monetary theorists believed the recession that followed could be offset with monetary expansion, a disastrous move that produced The Great Inflation and ultimately wage and price controls. It’s a history lesson policymakers seem to have forgotten as they replaced it with modern monetary fantasies to fight the pandemic. Terence Corcoran, Jan. 26.

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The new interventionism isn’t new

Its current iteration is at least its fourth or fifth. But its fatal conceit remains the same. Yes, we have artificial intelligence, we have a highly-educated work force, we have supercomputers, we have sophisticated modelling, we have all sorts of enhanced analytical methods. But the fundamental things still apply: how do the new interventionists know in what direction they should guide history? What special insight do they have into the known unknowns, let alone the unknown unknowns we will certainly encounter? And how, having decided to bet the economy on their hunches, do they assure their plan doesn’t get hijacked by politics? Will the Coalition for a Better Future’s vision leave out any of its 122 member groups, for instance? Or not spread industrial-policy largesse to every province and territory? Fat chance. William Watson, Jan. 20.

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Release the potato-control bureaucrats

A recent missive from the Canadian Food Inspection Agency informs us it is consulting stakeholders as to regulations on the maximum size of diced or cubed white potatoes sold in cans. The inflationary effects of these sorts of idiotic regulations are twofold. First, by regulating the sale of potatoes, the federal government inflates their costs. Second, by employing people to draft and enforce the regulations, it diverts labour away from productive uses and so increases the general scarcity of goods and services.

Releasing the potato-control bureaucrats to do real work would therefore kill two inflationary birds with one stone. Similar reductions of government employment, spending and regulation should be pursued, not only at the food inspection agency, but across all agencies and departments. It would go a long way in reducing Ottawa’s infliction of economic misery on Canadians. Matthew Lau, Jan. 26.