Sunday, December 16, 2012

The Carney brouhaha

This is causing a bit of a stir in some circles today in light of the Globe piece yesterday: "The Carney affair with the Liberal Party: It will all end in tears." I'm not sure exactly who would be the ones ending up in tears here so I leave it to others to determine that.

But I do recall some tears that were shed on Carney's departure. They were those of Finance Minister Jim Flaherty, pictured here in an emotional gaze toward the Bank of Canada Governor. If there were any questions about Mark Carney's judgment in speaking about Dutch Disease or the content of what he said in a speech to the CAW, cited by Gordon, surely Mr. Flaherty would have been much less emotional on Carney's departure. The fact that people are only now giving a hindsight look to those speeches means that at the time, those Carney speeches certainly didn't do enough to raise any question about Carney's judgment as Governor.

Conflicts of interest abound in small circles Canada. They should always be disclosed and whether Carney did that internally with the Bank of Canada on the Brison holiday is unknown. Has anyone demonstrated that he didn't disclose it within the Bank by the way? Irrespective of that point, on its face, a conflict of interest doesn't mean that Carney's judgment was or is tarnished. Those asking questions now should demonstrate that there were decisions made by Carney that exhibited any taint. In the absence of that, this is all about appearances.

And on the appearance scale, it's all not great. He probably should have done more to keep Liberal advocates at a distance. But this seems to be more of a political question about his political instincts and not core to his Governor role. That's the way I see it, anyway. The party needs a political leader with good political instincts first and foremost. And why he was not the best choice to be courted in the first place.

I think it bears mentioning, as well, if we are going to now suggest that a few wayward Liberals courting Carney to run somehow taints the very Governor's role by making that position a place of possible political ambition, that over the past few years the closeness of Carney and Flaherty et al. should be examined to a greater extent. In the post-2008 financial recession era, our Bank of Canada Governor, whoever it might have been, might have achieved the stature that Carney has. Might have. We had Carney though and his profile made him more of a star-like figure. This government has never hesitated to hitch themselves to Carney. So let's consider that as well if we're going to talk politicization of that position.