Front Burner - Who is Mark Carney?

Episode Date: January 23, 2025

There’s been a ton of buzz around Mark Carney throwing his hat into the Liberal leadership race. Many Liberals see Carney — the former head of the Bank of Canada and Bank of England, and a former advisor to the Trudeau government — as the best hope of reversing their party’s dire fortunes. This is Carney’s first foray into party politics. So what do we know about his track record and his beliefs? Is he really, as he claims, an “outsider?” And, in a time of rising populism on the right and left — when many believe big, global financial institutions have made their lives worse — can a man like Carney meet the moment?Today, a documentary looking at Carney’s life, work, and views.

There is no shortage of scam artists and true crime. But I'm guessing you've never heard of one quite like Caitlin Braun. For over two years, Caitlin Braun conned more than 50 birth workers into thinking that she was pregnant. I'm Kathleen Goldtar, and this week on Crime Story, I sit down with Sarah Trelevin, the host of the con, Caitlin's baby. Find Crime Story wherever you get your podcasts. Hi there, I'm Jamie Poisson.

Are you following the Frontburner feed? If not, I would strongly recommend it. That way you won't miss our deep coverage of all the dizzying stories that you're curious about. Especially the Canadian election news and US politics. We're all over it. So please do give us a follow. Alright, here's today's episode. What are they making up there of the overtures and sort of trolling to Canada about being a part of the United States? Well, I mean the bottom line is not going to happen. To respect that. So last week, Mark Carney, the former head of the Bank of Canada and Bank of England, UN's special envoy on climate action and finance and official contender for leader of the Liberal

Party, did an interview with Jon Stewart on The Daily Show, three days before he announced his candidacy. It's now rack be cool about it. Carney joked around with Stewart, teased the idea that he might run, took some shots, a conservative leader of Pierre Poliap. Poliap seems like a villain in a, like, Karate Kid movie. Like, there's something very, very off-putting. What is he like in person? Uh... Uh... Karate... Take your time. very, very off-putting. What is he like in person?

Take your time. You're not, you're not, you're not far off. And made the case that... Wild hypothetical. Let's say the candidate wasn't part of the government. As someone who's never actually held political office. Let's say the candidate had a plan to deal with the challenges in the here and now. You sneaky! You're running as an outsider. I am an outsider. For a lot of Canadian viewers, the Stuart interview is probably the first time they saw a side of Carney

that wasn't sober central banker. That is, if they knew him at all. An abacus data poll taken in the 48 hours after Justin Trudeau announced he was stepping down as liberal leader on January 6th found that just 24% of respondents could recognize Carney from a photo. But for many liberals, after years of rumors that Carney might run, his announcement last Thursday was huge. I'm back home in Edmonton to declare my candidacy for leader of the Liberal Party and prime minister of Canada.

Many in the party believe that if anyone has a chance of beating the incredibly unfavorable odds for the Liberals to actually win the next election, it's probably Carney. In many ways, this is the candidate from central cast. Smart, witty, handsome. This is Rob Russo, the Canadian correspondent for The Economist and the former Ottawa Bureau Chief of CBC News. Here's how he explains the liberal case for Cardiff.

Given the moment that we're in, the Trump moment, the moment when Canada's economy is facing a staggering blow from south of the border, the moment when we could be not just alone in this crisis, but part of a global crisis, who would you turn to? Well, for many liberals, you would turn to somebody who has held important institutions through global crises. And Mark Carney's done that. But again, this is Carney's first official foray into party politics. So who is he? What does he actually believe and what's his track record? As a former advisor to

the liberals and the former head of not one but two central banks, can he really call himself an outsider? And given the populist anger that we're seeing on the right and left, given how so many people see big global financial institutions as a source of so many of their problems, can a guy so closely linked with those institutions and ideas actually meet this moment? Today, front burner producer Ali Janes is gonna dig into all of this. In the first half, the story of how Mark Kearney

got to where he is today. In the second, what we know about his politics and worldview and the criticisms around some of his ideas and projects. I'll let her take it all from here. So let's start at the beginning. Mark Carney was born in the tiny town of Fort Smith, Northwest Territories, and grew up largely in Edmonton. His dad was a high school principal, and then later a professor at the University of Alberta. His mother, he's told reporters, stayed at home to

raise the kids and then later returned to teaching. Carney has talked about his childhood dreams of playing hockey for the NHL, but he ended up doing something way different. He got a bachelor's in economics from Harvard and then a master's and doctorate at Oxford. He says he went into banking to pay off all those student loans. He ended up at Goldman Sachs, where he soon became a rising star. This is where he first met Evan Siddal, who later went on to run the Canadian Mortgage and Housing Corporation and who most recently was CEO of the Alberta Investment Management

Company. I think I choose my friends well. 25 years later, that friendship is still going. Look, he's wickedly intelligent. Any room he's in, he's clearly the smartest guy in the room, and even smart people in the room admit that. He's also quite funny, caustically funny sometimes, cracking jokes all the time. In 2003, Carney was appointed deputy governor of the Bank of Canada. At the time, Siddall thought his friend was making a huge mistake.

He left behind literally tens of millions of dollars and a sure partnership with Goldman Sachs to just be not the governor of the Bank of Canada, but a deputy governor. And I remember at the time saying, what are you doing? You're giving so much up. And he struggled, admittedly, with that trade-off, but resolved it in favor of serving his country. And he saw a path then, and I think it's led us to today, to be a leader in public policy in Canada.

That's what drove him. After about a year at the central bank, Carney took a job high up in the federal bureaucracy of the Department of Finance. He was there initially during the liberal Paul Martin governments and later under conservative Stephen Harper. And then Harper, so much of him that he promoted him

to governor of the Bank of Canada. Here's the economist's Rob Russo again. And really just after he began that job, the financial, a global financial crisis started. This is going to be one of the watershed days in financial markets history. It was a manic Monday in the financial markets. The Dow tumbled more than 500 points after two pillars of the street tumbled over the weekend. Lehman Brothers, a 158-year-old firm, filed for bankruptcy.

Lehman, like so many other investment banks and banks, really got quite frankly caught up in the housing bubble. But like every bubble, the bubble ended. Leaders of France, Britain, Germany and Italy will try to thrash out a joint response to the financial crisis. But there are deep divisions. And he kind of won no end of plaudits for the way he reacted very, very quickly to that, dropped interest rates by about 50 basis points, and got Canada out of that crisis sooner than other countries. He's credited for having done that. Evan Siddall.

You know, this guy is one of Canada, he's one of the world's most significant macroeconomists. And his knowledge of economics and understanding of business and markets combined was a pretty powerful and unique combination. Carney is often described as being calm in a crisis. Something Siddall saw firsthand after Carney convinced him to leave Goldman Sachs and come work with him at the Bank of Canada. Mark's the kind of person who will get to the crux of an issue quickly. There are always tough parts of these decisions to make, and those are the ones that hold people up.

He's been able to think and then act courageously in those circumstances, and I think that's probably one of the things that distinguished him. Then in 2013, Carney moved to London to run the Bank of England, making him the first foreign governor in the bank's 300-year history. The UK press described him as a rock star economist, someone who'd been brought in to shake up an institution seen as incredibly stuffy, even by central bank standards. I remember when he said when he took the job in the wake of the financial crisis that he was going where the challenges are the greatest.

This is Lucy Meakin, a reporter at Bloomberg News in London. She covered the Bank of England for six years, the majority of Carney's tenure. But I don't think he could have seen that he was going to end up going to deal with Brexit or the start of the pandemic. Breaking news out of London that could have serious economic and political reverberations for the rest of us. The cliffhanger vote on whether Britain will stay in the European Union. The British people have spoken and the answer is we're out. This will be a victory for real people, a victory for ordinary people, a victory for

decent people. The UK Prime Minister stepped down after voters ignored his plea to stay in the EU and voted to leave in a referendum. A negotiation with the European Union will need to begin under a new prime minister. I think long term, I think many would agree he offered a steady pair of hands at a very difficult time. My memory is having worked Brexit night and I'll be honest, there was

quite a state of panic, and watching, waiting for David Cameron to resign as Prime Minister, and watching Mark Carney on our feed from the Bank of England, waiting to give his speech afterwards. And there was very much a sense, to quote the economist Danny Blanchflower, that he was the only adult in the room at that moment in time. So some market and economic volatility can be expected as this process unfolds. But we are well prepared for this.

Carney had by that point made a number of political enemies in the leave camp of the ruling conservatives. He had publicly waded into the Brexit debate, warning it could cause a recession. And of course, the leave camp won. You know, there was one moment where he was accused by one of the lawmakers of backing Remain. And that's that we know that Goldman Sachs has been a donor to the Remain campaign. You are a former managing director of Goldman Sachs.

Could I just give you the opportunity to refute any suggestion that Goldman Sachs may have put pressure on you to say confused? Wow. And then there was another moment where Jacob Rees-Mogg, the politician here, referred to him as a second tier Canadian politician. So, you know, these were quite fired up times. Those detractors are still around. Just the other day, former Prime Minister and fervent Brexit supporter Liz Truss said Carney would be disastrous for Canada. Well, I believe that he made major mistakes in the management of the Bank of England. He has pushed that zero, which has been a disaster, not just for the UK, but for many countries across the world.

It is worth mentioning that Truss was the UK's shortest-serving prime minister and is widely blamed for bringing the UK to the brink of a recession. Actually, on the day she became prime minister, the tabloid The Daily Star began a live stream of a head of lettuce in a blonde wig to see which would last longer, truss or the lettuce. Truss resigned after 50 days. The lettuce won. Anyway, Lucy Meakin says that it's hard to separate the economics of Carney's tenure from all of the political tumult.

But that while there were some missteps, including a confusing policy that led one MP to call Carney an unreliable boyfriend, on balance she thinks his economic record is now generally viewed in a pretty positive light. I think when you look at the financial regulation side of what he achieved at the Bank of England, that was quite far-reaching and that has stayed in place and that was pretty central to the stability in the wake of the Brexit vote. And also he focused attention on more kind of modern challenges that the bank hadn't really grappled with previously like climate change or digital currencies. She says that inside the bank he is seen asled with previously, like climate change or digital currencies. She says that inside the bank,

he is seen as a change maker and also someone who could be kind of a tough boss. I think he is a boss. He could be quite sharp and unforgiving at times. People used to call it getting tasered. You didn't want to be the person to ask him a stupid question in a press conference. At the same time, he also, you know, brought up a generation

of people who are now entering leadership roles at the Bank of England who worked for him. So I think he probably was quite a supportive boss at times too. Carney returned to Canada in 2020. He took a plum job with asset management firm Brookfield and began advising the Trudeau government, first informally and later formally. This sent the Ottawa rumor mill into overdrive about his political aspirations. Now of course, he's made them clear. Canada is a proud nation of builders. And now, in these extraordinary times, it's time to build together. Thank

you for your support. Let's go group. Alright, we're going to take a short break. When we come back, we'll take a look at what we know about Carney's politics and beliefs. The controversy surrounding some of his ideas and initiatives, and whether, in a time of anger at big global institutions, a time when so many people are calling for change, Canadians will want what Carney's selling. ["The Money Show"]

Hi, it's Rameit Sethi here. You may have seen my money show on Netflix. I've been talking about money for 20 years. I've talked to millions of people and I have some startling numbers to share with you. Did you know that of the people I speak to, 50% of them do not know their own household income? That's not a tight ball, 50%. That's because money is confusing. In my

new book and podcast, Money for Couples, I help you and your partner create a financial vision together. To listen to this podcast, just search for money for couples. If you choose me as your leader, we will offer Canadians a clear choice in the next election. Experience versus incompetence. Plan versus slogan. Calm versus chaos. Last Thursday, Mark Carney launched his campaign in Edmonton.

His speech, which was criticized as being a little low energy in his delivery, included a lot of hockey metaphors. And I'm coming into this match, coming into this game, knowing that we are well behind. But we're getting warmed up. We're gonna head out in that third period and we're well behind. But we're getting warmed up. We're going to head out in that third period, and we're going to win. Yeah!

Woo! Yeah! Woo! And it carved out a pretty focused message. The economy needs fixing, and he's the one with the experience to fix it. So if you remember one thing from what I say today, remember this.

I am going to be completely focused on getting our economy back on track and if you wonder why I can succeed where others have failed or will fall short consider this I've helped manage multiple crises and I've helped save two economies. I know how business works and I know how to make it work for you. Carney took a lot of swipes at conservative leader Pierre Pauliev and at the populist anger he represents. Canada's broken was one of Pierre Pauliev's many three-word slogans. And it couldn't be more dangerous. Now, in the UK, I saw firsthand what happened there

after years of conservatives shouting that their country was broken. Conservatives don't run around saying Canada is broken because they want to fix it. They want a license to demolish and destroy, including many of the things on which we all and regular people depend, because populists don't understand how the economy and our society actually works." He also took aim at what he called the far left. "...they too often see government as the solution to every problem with a reflex to spend and subsidize that just treats the symptoms

of the problems but doesn't cure the disease. We can't redistribute what we don't have. And we can't support the vulnerable in our society or defend this great country if we have a weak economy. But maybe most notably, he fired clear shots at the party he's been advising. I know I'm not the only Liberal in Canada who believes that the Prime Minister and his team let their attention wander from the economy too often.

The party he now hopes to help. Our growth has been too slow. People's wages are too low. Necessities like groceries and rent are too expensive for too many. The federal government spends too much, but it invests too little. We don't yet know much about what policies Carney will propose. He said he'll be rolling them out in the coming weeks. But we have other indications about some of his priorities and worldviews. This is a man who believes very, very strongly in the energy transition, that

we have to move away from fossil fuels and move towards greener sources of energy. Rob Russo again from The Economist. He interviewed Carney last year. He said during the interview that when people are looking to invest in Canada, one of the first questions they have is where is their energy gonna come from? Is it clean energy? So he wanted to do everything he could to encourage that. It puts him in a difficult position because Canada's biggest export to the United States,

for instance, right now, is crude oil. He did say that he wanted to help the energy sector of Canada convert to cleaner extraction. Things like carbon capture and storage and other technologies that would lead to... We're going to talk more about Carney's environmental track record and some of the critiques of it in a few minutes. But before we get into that, it's helpful to understand how Carney views the role of companies in helping to solve big problems like climate change. This is something he lays out in his 2021 book, Values, Building a Better World for All.

Here's Will Hutton. He's a journalist and writer and the president of Britain's Academy of Social Sciences. His most recent book is This Time No Mistakes, How to Remake Britain. The case that Mark Card is trying to make in values is that the kind of laissez-faire, top-down, free market economics of the last 45 years since the advent of Reagan and Thatcher, and going to be followed through, turbocharged, by the election of Reagan and Thatcher and going to be followed through turbocharged by the election of President Trump is fundamentally wrong.

Rob Russo here. One of the things he says is that there should be some moral guardrails around the market, that the market is left with its own devices. Bereft of moral guardrails leads to the kind of things that we saw during the 2008 recession where people on Wall Street knowingly pumped and then dumped a whole bunch of terrible toxic mortgages. He cites that as an example of the failing of the market. Now this is not to say that Carney is laying out a case against capitalism or against corporations. Far from it.

He sees a crucial role for companies and for the financial system in directing their power and resources towards solving big problems like climate change. But he is calling for them to behave more morally, to serve the populations where they operate. And he argues it's in companies' own self-interest to do so. Here's Will Hutton again. Will Hutton I think it's a very important argument that companies that perform best across a range of metrics, even profitability, revenue growth, productivity, innovation, tend to be mission or purpose driven from which they make a great

deal of money. But the money and the profit flows from the pursuit of mission and purpose. Hutton wrote a glowing review in The Guardian describing the book as a landmark achievement, both for the case it makes and because one of the world's most prominent central bankers is the one making it. If the prevailing ideology as it has been the last 45 years is that the way to make capitalism work is to kind of relentlessly permit the prosecution of self-interest, putting the individual and individual economic interests at the center of the economic and moral universe and the financial universe, which is essentially kind of if central bankers

have a value system, that's their value system. For a man like Mark Carney to declare complete independence from it and then to criticize it so effectively and so passionately was quite something. Not everyone views it that way though. The Canadian political columnist David Mosskrop says that while in theory the call for companies to do the right thing is a good one, that's just not how the market works. The frame of contemporary capitalism is the goal of the firm is to maximize profits.

And that drive for profits has been what has led to climate crisis, to exploiting workers at home and abroad, to suppression of the state, and asking a company to change is part of the cliche, but like asking a leper to change its spots, like it's just not what it does. And so in effect he's thinking that we can solve the problems we have with the tools that have been used to create those problems in the first place. And I think a lot of us are a little bit incredulous. We just don't think that's going to happen. We actually have a pretty big real-life example of Carney trying to put the ideas that are in his book into action. Critics say it hasn't panned out.

It's something called the Glasgow Financial Alliance for Net Zero, or GFANS. We know that only mainstream finance can fund the estimated $100 trillion of investment needed over the course of the next three decades for a clean energy future. Carney laid out the premise at the UN's COP26 summit in 2021. The idea was to get banks, asset managers, investors and other heavy hitters in the finance world to help move the global economy towards net zero emissions. GFAN's members pledged to move their portfolios towards low-carbon investments and away from fossil fuels. Over 450 major financial institutions from 45 countries

are committing to manage their balance sheets, balance sheets that total over $130 trillion in line with net zero. So make no mistake, the money is here if the world wants to use it. GFANS was hailed at the time as a major breakthrough towards funding the energy transition. Here's Fiona Harvey, Environment Editor at the Guardian newspaper. We need investment in renewable energy and we also need companies to stop investing in fossil fuels.

So getting the financial sector of the world involved in this effort was absolutely crucial. And so what was the actual commitment? Like what were they pledging to do and to not do when they signed up to this? Well that is a good question because that was always a little bit moot. That was always a little bit moot. There was always more of the symbolic and the intention to signal a change through GFans than there was a very strong and clear commitment as to what these companies would do. Even after the rules for members were tightened, Harvey's reporting uncovered significant loopholes....whereby companies could sign up to be members of GFANS, but could still be continuing to put investment into fossil fuels of one kind or another.

Many climate groups slammed the initiative as greenwashing. Maybe more to the point though, Harvey says, after four years, GFans doesn't have hard results to show for the effort. Well, we are seeing banks and other financial institutions, other financial actors, continuing to pour money into fossil fuels. In many quarters, it's tended to accelerate in the last few years. Of course, it wasn't possible for Mark Carney in 2021 to predict that Russia was about to invade Ukraine in 2022, but that's what happened. You could be a member of GFANS and still try to take advantage of this fossil fuel boom that happened after Vladimir Putin invaded Ukraine. It's very difficult for even very climate committed

executives in banks to go along and say, okay, there's a boom in fossil fuels, they're making money hand of a fist, but we've got to ignore that because we've got this long-term commitment to the climate. Last year, a report from the Center for Economic Policy Research found very limited difference in how banks who were members of GFANS were lending and investing compared to non-members. The findings, the report said, raise questions about the effectiveness of voluntary private sector initiatives in driving decarbonization efforts. Has Carney responded to these critiques that this has been ineffective, that we haven't

seen results from it, that there have been these loopholes? Has he responded to any of that? Mr. Carney has so far alluded to me. As he appears to be intending to stand for high political office in Canada, perhaps someone at your end could put him on the spot. We did reach out to spokespeople for Carney and to the GFANS organization, but we didn't hear back. Mark Carney certainly sees himself

as a leader of various kinds. And the thing about a leader is you've got to take responsibility. So I would like to see Mark Carney take responsibility for GFans and what has happened and to try and remedy this awful situation where companies, investors who had promised to help to save the world, save the climate, are now doing exactly the opposite. Come on, Mr. Carney, step up. In the past couple months, GFANS has faced more setbacks. The six biggest banks in the US all pulled out of the pledge ahead of Donald Trump's inauguration.

There are reports that some Canadian banks may be planning to walk away soon too. I know I'm not the usual suspect when it comes to politics, but this is no time for politics as usual. No, it's not the time for lifelong politicians such as Pierre Pauliev. Politicians with bad ideas. Naive and dangerous ideas. — Carney made it clear in his speech that he's not just gunning to be liberal leader. He's running to be prime minister.

To be the one to bring this party back from the 23-point leg behind the conservatives and beat out Pierre Poliev. — Carbon tax Carney and carbon tax Christia are just like Justin. And then you have carbon tax Carney. This guy says the carbon tax is too low. And yesterday he just won the endorsement of the crazy carbon tax minister, Stephen Guilbault. He will be the voice for the billionaire globalist elite that have been impoverishing

the working class around the world for the last several decades. Poliev, of course, is running on a message of change. So let's fire the NDP liberals who caused the problems, ask the taxes, slash the bureaucracy, build the homes. And so for many, the big question is, at a time when change candidates on both the right and left are pummeling incumbents all over the world, when there's so much anger at the current structures

and the people who run them, can Carney meet the moment? Here's David Moskrop again. At the end of the day, I think my critique of him is that he is thoroughly an insider, small L, and large L liberal who believes in the power of the free market and at a time where people are quite rightfully critical of that free market and believe that that market has been complicit

in making their lives worse, keeping their wages lower than they would otherwise be, making their food and their gas more expensive than it would otherwise be, and contributing to the climate crisis. And if you're a liberal, you've got to have an answer for what are you going to do with the climate crisis? What are you going to do about affordability?

And in the long-term, what are you going to do about the quality jobs and wages, even though wages have been going up. Rob Russo the economist reporter. Again it's one of the questions I had for him in this interview is people aren't necessarily in Canada or elsewhere looking for members smart members of the elite to lead them they believe smart members of the elite have let them down over the last 30 years, have led to globalization and free trade. The things that saw manufacturing jobs for a lot of Canadians head to Mexico or the southern United States and they lost those jobs and they lost

their pensions and they lost their benefits. I mean, he has responses to that. He says, you know, he grew up as the son of a high school teacher in Edmonton delivering papers. He's not a member of the elite by background. He got into Harvard on a scholarship. He had to pay off his loans. So he went to work at Goldman Sachs to pay off the loans. And that kind of rocketed his career. Karney's pitch that he's a political outsider may technically be true in the sense that he's never held elected office, even if he has been advising the current liberal government.

But when it comes to the broader systems he represents, it's a tougher case to make. David Mosskrop. The Conservatives are very, very quick to say, I'm not sure that the chair of an asset management company, a former Goldman Sachs executive, a Bank of England governor, a Bank of Canada governor, and a Liberal Party adviser is exactly an outsider. That seems like a consummate insider, even though he hasn't been elected to political office. That's

the way that Carney's going to be framed. But Carney's friend, Evan Siddall, believes that ultimately, Carney has the chops and the track record to really tackle the root causes of the anger people are feeling. And that that's a solid pitch to Canadians. Well, the core problem is economic. The core problem is economic. And I'd rather have a macro economist leading these solutions than a career politician, frankly. The problems are affordability, inflation-driven, housing, etc. These are all subjects Mark knows better than anyone.

He is among the best macro economists alive today. And he will know how to design a plan and execute on it and sell it. I've worked around the world, but I'm grounded in what I learned right here in Edmonton. To be responsible, to be fair, to stay humble, to work together and to never ever give up. All right, that is all for today. This episode was produced by Ali Jane, Sound Design by Marco Luciano. I'm Jamie Poisson. Thanks so much for listening and we'll talk to you tomorrow.