Canada’s mainstream media missed their chance to take a critical look at the state of the economy last week, preferring instead to dish out a heaping helping of pablum. The Globe and Mail and the Canadian Press news agency, for example, focused on the reassuring words of Bank of Canada governor Mark Carney and federal Finance Minister Jim Flaherty, who testified Friday before a rare summer sitting of the House of Commons finance committee.
Their reporting gave the misleading impression that Canadians aren’t affected too much by the perilous state of the global economy because, in spite of its troubles, our economy is performing OK. That may be true for senior politicians, bankers and other high-flying business execs, but not for most Canadians.
Dismal long-term trends
The real truth is that for the last 40 years, our economic system has been buffeted by one crisis after another, including deep recessions, slowing growth rates and market meltdowns. Average unemployment rates have stayed persistently high, while average real wages have remained stagnant in spite of significant productivity gains and rising corporate profits.
Meanwhile, hard-pressed Canadian households have taken on mountains of debt, boosting the country’s overall rate of private indebtedness to record levels. The parliamentary pledge to wipe out child poverty by the year 2000 has long been forgotten. Welfare rates are well below poverty lines, while Canada’s food banks are doing a roaring business.
These are only a few of the chronic economic problems that, in one way or another, affect most of us.
Yet cheered on by the mainstream media, governments have responded by cutting spending and making balanced budgets their number one priority. Moreover, they’ve done little to deal with our myriad environmental problems, including the impending disaster of climate change. Instead of investing in mass transit, for example, they’ve preferred to subsidize the private automobile. Instead of encouraging local farming, they’ve supported an agribusiness food system that consumes at least 10 times more energy than it produces.
True, mainstream media have, at times, reported on these issues. But when it comes to focusing on the state of the economy, they routinely quote senior politicians and bankers who assure us that although things aren’t all that great, we’ll somehow muddle through.
Craig Wong’s Canadian Press dispatch, for example, led off by dropping a real clanger: “The global economic upheaval is slowing growth in Canada, but Bank of Canada governor Mark Carney doesn’t believe the country faces the prospect of its largest trading partner falling into recession.” Unless Wong is blessed with mind-reading skills, he has no way of knowing what Carney really believes regarding the outlook for the U.S. economy. But judging by what Carney actually said, the Bank of Canada governor was clearly trying to calm Canadians’ justifiable fears of further economic turmoil.
The Globe’s Jeremy Torobin and Bill Curry reported that even if Canada does experience another recession, Flaherty and Carney have “enviable room to manoeuvre compared with other advanced economies.” Translation: Don’t worry, be happy!
For informed analysis of Flaherty and Carney’s soothing comments, Canadian Press and the Globe turned, as usual, to economists at the big financial institutions—the Royal Bank and BMO Nesbitt Burns Inc. in the case of the Globe, while CP consulted CIBC World Markets.
It’s as though only senior politicians, bankers and business types are qualified to speak in stories such as this—stories which actually conceal how poorly Canada’s economic system works for the rest of us.