A few months back, I did a post discussing the internal contradictions of global nationalism. In yesterday’s election in Canada, we saw an almost perfect example of that problem:
“Poilievre had been running a disciplined and effective campaign which had him with a 25-point lead in our final poll of 2024,” Graves told me. Poilievre’s argument, he said, boiled down to “Canada broken, Trudeau bad, and axe the [carbon] tax.” . . . But suddenly everything was “radically disrupted” by several factors, Graves said, like Trudeau’s departure from the race in January.
However, the “most important” disruption for Poilievre was the “visceral recoil” Canadians felt when they heard Trump talk about annexation.
Starting in February, Trump launched a trade war against Canada, with on-again, off-again tariffs that left Canadians reeling. A wave of nationalism swept the country, with Canadians booing the American national anthem at hockey games, boycotting U.S. products, and all but abandoning cross-border travel.
This put Poilievre in a near-impossible position. Much of his base—including many of his MPs—admire Trump. But with Trump openly attacking Canada, and with Poilievre’s own anti-woke rhetoric and disdain for the mainstream media, he found himself trapped. Attempts to distance himself from Trump could alienate core supporters, while embracing the American president would push away everyone else.
Mark Carney is the leader of what is expected to be a new Liberal government in Canada (in coalition with a smaller party.) He previously served as head of both the Bank of Canada and the Bank of England. (Sadly, America is too nationalistic to contemplate foreign central bankers.) As far as I know, no central banker has formally endorsed NGDP targeting, but Carney may have come closer than any other. Here are some comments that he made back in December, 2012:
“If yet further stimulus were required, the policy framework itself would likely have to be changed. For example, adopting a nominal GDP (NGDP)-level target could in many respects be more powerful than employing thresholds under flexible inflation targeting. This is because doing so would add “history dependence” to monetary policy. Under NGDP targeting, bygones are not bygones and the central bank is compelled to make up for past misses on the path of nominal GDP …
However, when policy rates are stuck at the zero lower bound, there could be a more favourable case for NGDP targeting. The exceptional nature of the situation, and the magnitude of the gaps involved, could make such a policy more credible and easier to understand.
Of course, the benefits of such a regime change would have to be weighed carefully against the effectiveness of other unconventional monetary policy measures under the proven, flexible inflation-targeting framework.”
PS. I would argue that the single most consequential action of President Trump’s first 100 days (for better or worse) was his trade war with Canada, which clearly prevented the election of a Conservative administration. Before the trade war, the Conservatives were set to win by a historic landslide.
Next up, Australia:
SYDNEY, April 29 (Reuters) – Australian university student Jessica Louise Smith says she will cast her vote in Saturday’s general election with only one objective: avoiding the “worst possible” outcome of a right-wing government.
The 19-year-old said the prospect of conservative opposition leader Peter Dutton winning power was “very frightening”, after seeing the disruption caused by Donald Trump in the United States.
It should be another close one.
