Emil Bjarnason used to tell a story about a man named Stanford Kingsley Claunch. Claunch was best known for pioneering his own idea of medicine. His theory was that disease was a person’s best friend. The purpose of germs he argued was not to cause ill health, but to produce the diseases that cured illness. He was especially fond of malaria which he claimed was ‘guaranteed to burn up all the poisons that make people sick’ provided that an ignorant doctor didn’t prescribe medicines that would interrupt the fever before it had done its job.
Fortunately, this nut was discredited before he could harm anyone.
Unfortunately, the Bank of Canada is putting Dr. Claunch’s theory into practice.
Instead of dealing with the crisis in manufacturing jobs, the Bank of Canada is fighting a made up bogeyman of ‘out of control inflation’. Their suggested cure? Increase interest rates to create job losses.
As part of the twisted logic of capitalism, CIBC recently celebrated this Dr. Claunch style strategy of creating a manufacturing jobs crisis to reduce inflation.
“The Bank of Canada, eying an economy operating above its non-inflationary speed limit, will welcome the dampening influence of an even stronger currency on both economic growth and inflation. A couple hundred thousand additional factory job losses, while far from derailing domestic economic growth, might be a route to opening up a bit of slack in today’s ultra-tight labour market, forestalling a more serious wage threat.”
Another way to say this is:
“The Bank of Canada will be happy that the skyrocketing loonie will cause more factory closures and job losses because this may dampen inflation. Throwing another 200,000 manufacturing workers out of a job, far from being a bad thing, is a good thing because far too many workers still have a job, and this will help us reduce wages.”
This meant another 31,000 manufacturing jobs were lost in April and May and if the big banks like CIBC get their way, another 200,000 are to come.
Although he never got much respect in the medical community the Bank of Canada is dedicated to keeping the name of Dr. Stanford Kingsley Claunch alive.
Jason Mann is the author of Activist’s Guide to Political Economy and Activist’s Guide to Trade Union Theory. You can get either of his two books for free, no catch, at
Tags: bank of canada, central bank, inflation, interest rate, jobs, manufacturing
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