John Robson: Kathleen Wynne, the noted economist, knows how much your house should be worth
John Robson | April 20, 2017 1:54 PM ET
Fresh from their triumphs on energy, health and other files, the Ontario Liberals plan to extinguish an “overheated” Toronto housing market. When politicians start deciding how much your house should be worth, it’s time to hit the roof.
Chesterton once said the modern world consists of formerly coherent virtues wandering about in mad isolation. It certainly seems to consist of economic principles doing so.
People now routinely ascribe to government the qualities once attributed to God, namely omniscience, omnipotence and infinite compassion, despite the virtually universal view that politicians and bureaucrats are ignorant and self-serving. So let us soften our scorn for the credulity of past ages long enough to consider that the major thrust of government policy over the past decade has been to “stimulate” the economy by keeping interest rates artificially low, after deficit spending failed, was repudiated, was adopted again and failed again.
Reputable opinion is all bwa bwa bwa about how the tax system should encourage saving not consumption to foster growth. But it’s also all bwa bwa bwa about needing to keep the overnight rate down at 0.5 per cent, 0.75 or one per cent to encourage consumption, not saving, to foster growth.