Mailbag of Advice for Global Economists

What if the world’s economic movers and shakers sent me letters to seek advice, sort of in the style of the old Betty and Veronica advice columns on fashion, dating and social etiquette? This week the mail bag might contain some beauties like these:

Dear Todd:

I’m worried about deflation, so I’ve instructed my country’s central bank to increase its inflation target to 2 per cent, and to fire up the money printing press. Have I overstepped my bounds?

Shinzo Abe,
Prime Minister of Japan

Dear Shinzo:
This is tricky—and believe me, you’re not the only politician wanting to kick-start his economy with some good old fashioned printing of money. But there are rules around how this “request” may be made of your central bank. You see, in the international investment community it’s extremely important that central banks appear to be free of political interference. It’s like a being a teenager—you desperately want your friends to think you have no curfew and that you’d really just prefer to be home by 10 pm. But in front of the whole world, you’ve instructed your central bank to “do what you say.” It’s like a teenager whose parents have posted the curfew on YouTube, and everyone has watched it. Not cool.  Next time, try to be more discreet. Make it appear as if you and the central bank agreed on the curfew (oops, I mean inflation target) together. And don’t put it on YouTube.


Dear Todd:
My friends are pressuring me to block the Keystone XL pipeline from Canada, but I get the feeling my boss and a lot of out-of-work Americans want it to proceed. What should I do?


Senator John Kerry,
nominee for U.S. Secretary of State

Dear John:
Peer pressure is something that we all deal with, no matter how old or established we are in our career. There is no simple answer, but ask yourself this: what is in the best interest of my employer? In your case, that is the people of the United States. Your friends within the environmental lobby do raise some valid concerns, but is blocking this pipeline project really in the long-term interests of your country? What might it mean for U.S. energy imports from countries with even worse environmental policies? Or what unintended consequences could arise if Keystone XL is blocked—and could those consequences encourage energy pipelines with even worse environmental outcomes to proceed? These decisions are never easy. But listen to your head on this one, and put immediate popularity aside.


Dear Todd:
I’ve been invited to an event of the world’s leading thinkers in economics and government. But it’s in Europe and it’s going to cost a bit of money—and taxpayers will have to pick up the tab. Should I go?

Naheed Nenshi
Mayor of Calgary

Dear Naheed:
The answer is 100% yes. The fact that you, among everyone in the entire WORLD, as an invited guest speaks highly of not only you but also the city of which you are mayor. Participating in the World Economic Forum Annual Meeting in Davos, Switzerland is a big deal—not anyone can just show up. You have two choices: reject or accept the invitation. If you reject the invite, you risk making the City of Calgary look silly, irrelevant and uninterested in what’s going on in the world. This is exactly the wrong message, especially when Alberta needs all of the international friends it can get right now. If you accept the invitation, you risk angering some petty, small-minded tax payer groups. They’ll say you’re “jet-setting” to Europe (as if there’s some other way to get to Europe than on a jet) and criticize you burning through tax dollars on a lark. A piece of advice: your spending must be beyond any reasonable scrutiny. Even one $14 orange juice or wasted hotel room, and you’re doomed. Spend like a hawk—but by all means go. Calgary can’t afford to not send you.


Dear Todd:
I’m the most popular kid in my class, but sometimes I don’t think everyone takes me seriously. What should I do?

Justin Trudeau,
Candidate for the Liberal Party of Canada

Dear Justin:
Stop trying to be all things to all people. Take a firm policy stand on something—anything—and let the popularity fall where it may. Not everyone needs to like you, and sometimes the need to be liked is what turns people off the most. You’ve got heart, passion, and loads of “I love Canada.” We get it. Now just tell us, once and for all, what you’d do as Prime Minister of Canada. You may be surprised how people will react.