The Ben Mulroney Show - Canada is about to discover Mark Carney is the man with the reverse Midas touch

Episode Date: March 12, 2025

Guests and Topics: -Canada is about to discover Mark Carney is the man with the reverse Midas touch with Guest: Matthew Lynn, Financial columnist and author If you enjoyed the podcast, tell a friend! For more of the Ben Mulroney Show, subscribe to the podcast! https://globalnews.ca/national/program/the-ben-mulroney-show Follow Ben on Twitter/X at https://x.com/BenMulroney Enjoy Learn more about your ad choices. Visit megaphone.fm/adchoices

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stands for Total Fund Savings Adventure, maybe reach out to TD Direct Investing. So there is this general consensus, and I believe a good faith consensus, that thus far, Mark Carney's success in the political arena has been due in large part to his reputation and his resume. And there are a number of people who may not agree with him but are respectful when they say at some point he is going to have to campaign on something

other than his resume and his reputation. And earlier today on another chorus radio network show a journalist out of the UK named Fraser Myers joined host Greg Brady to tell him about the reputation of Mark Carney that led to a particular nickname. He got a nickname actually in the financial world. Everyone called him the unreliable boyfriend. And that was because whatever he signaled

in terms of interest rates, he would often end up doing the opposite in terms of policy. So that might be something for Canadians to worry about. And so we've heard from a number of people in the UK who were there at the time when he was the governor of the Bank of England. And a great many of them have come up and said publicly

that he isn't all he was cracked up to be. Another voice echoing that is my next guest, Matthew Lynn, financial columnist and author. Matthew, welcome back to the Ben Mulroney Show. Hi, good to talk to you today. Okay, so on one hand, we've got what I think is a pretty devastating nickname, the unreliable boyfriend.

You've got one as well. You say Canada is about to discover Mark Carney is the man with the reverse Midas touch. Tell me what you mean by that. Why did you want to pen this column? Well, I think I mean, obviously, you know, we know to see become prime minister of Canada is back to become prime minister. You know, we're familiar with him from his eight years

in the UK as governor of the Bank of England. And as you said in your intro there, he runs a lot on his resume. And he's got a great CV. I mean, you look at the track record of big jobs, it's very impressive. But it wasn't so impressive when he actually did it. He wasn't a catastrophe as governor of the Bank of England, but he was relatively poor, particularly when you consider that he was kind of bought in as this rock star global central banker. He was the best central banker in the world. It was unusual to have somebody who wasn't British. And the track record was not very good. The economy did relatively poorly over the eight years that he was in charge. We can't blame

all of that on him. There were lots of different factors behind that, but he didn't help. If he was so magnificent, we were kind of seeing it in the statistics, wouldn't we? But we couldn't see it. The economy did quite badly, and he made quite a number of different mistakes. Well, and we'll go into those in just a moment, but just to level set for you, because I think I'm like a great many Canadians. After his time here in Canada as the head of the Bank of Canada, when we got word that a Canadian was making his way across the pond to lead the Bank of England,

I think without drilling down just on an emotional level, I think a lot of us were quite proud of that. And I'll be completely honest, once he left, I didn't really pay too much attention to the day-to-day operations of Mark Carney or the Bank of England. So when you say he made a number of missteps and mistakes, what are you talking about? Okay, well, there was as you as as the previous guest said a bit earlier on your station was

in the intro, he was he had this nickname, the unreliable boyfriend, he came up with lots of kind of fancy ideas on forward guidance on where interest rates would go, but he never stuck to them. Second mistake, I think, was that he clearly, in retrospect, printed too much money. He was very keen on quantitative easing, basically blasting the economy with money. We had the highest inflation rate in the whole of Europe. It spiked up a lot. I think you have to put that down to his role as governor. There was a decline in the city of London. The city

of London was one of the great financial centers in the world. It's been in steep decline with the number of companies that are listed, the number of share issues, the amount of bond trading. Again, it's not entirely the fault of the governor, but you might expect this kind of rock star governor to do something to turn that around, to do something to fix it. And finally, and I think this was perhaps the most important point, he really politicized the role, you know, the governor of the Bank of England, the Bank of England, bit like the Bank of Canada, or any other central banker was kind of above the political fray. You know, it was like

your bank manager, we don't expect your bank manager to tell you how to live. He's the person who looks after your money and keeps it safe. But it became very political. So in the whole debate about leaving the European Union, obviously that was a big argument here in the UK, but he very clearly took sides. And then actually in the last election, he came out very clearly with a big endorsement, very public, high profile endorsement of the Labour Party. You know, a lot of us felt that was inappropriate, given his reputation as governor of the Bank of England. We thought that he was going to be neutral. He wasn't involved in party politics. He just kind of kept the financial system sound. But he was the first governor to very clearly

take political sides. And a lot of people in this country felt that was a mistake. Was he in charge of the bank when he became sort of this poster child or the tip of the spear for carbon pricing and for Net Zero? Because I know I've heard a lot of him speaking on panels around the world, but I don't know if he was actually speaking as such in his role as the central banker. Yeah, I mean, he became very, very associated with the fight against climate change and the targets of net zero. And again, it's been very controversial. Everyone agrees that climate change is an important issue, but actually in the UK, it

hasn't worked too well. We have the most ambitious climate targets in the world, and it's actually hammered our industrial base and caused a lot of damage to the economy. So we're now kind of rowing back on it. And again, climate change is an important issue. It is something we can all debate about, but you're not sure you want the governor of the central bank to be taking the lead on it.

He should be more restricted, that person should be more restricted to running a good financial system, a solid financial system, rather than crusading on political issues. And I think that was. Well, I was going to point out, yeah, I was going to point out,

because I want to draw our attention back to one of the points you made about how Capital was fleeing the city of London. It was becoming increasingly hostile place for investment. And I can't help but be reminded of a moment. First of all, he was, in the past five years, he's been an advisor to the Trudeau government, which has set the tone for investment in Canada. He was also the head of Brookfield Asset Management.

He got into a little bit of trouble when we learned that six days after Donald Trump became president, he was the chairman of the board that led to the office of that company moving to New York City from Toronto. He could have gotten himself out of trouble by saying, look, this country has been hostile to investment for a few years. I'm going to make sure that that doesn't happen when I become prime minister. It seems like this is shades of that, where it's almost like despite knowing that it was going to his policies and his ideas and his influence would lead to an environment that was hostile to investment,

he was full steam ahead. Yeah, I think that's absolutely true. And I think it's a vatic criticism. And we know we noticed that, you know, in the in the UK, for example, I touched on this in the few minutes ago, there was a significant decline in the regulatory system. The Bank of England used to know the inner workings of the city, the plumbing of it pretty well and could get on top of any problems and sort them out before they became a major

crisis. And Carney didn't seem interested in any of that. He was kind of grandstanding on the global stage, hobnobbing with Greta Thunberg, making a big noise about climate change, and ignoring the kind of day-to-day issues. I think that was a significant problem, and part of the reason why, at the end of the eight years, we were pretty glad to see the back of him over here.

Good luck to you guys in Canada. We wish you well, and you're probably fortunate you've got a general election coming up quite soon. So, you know, obviously the electorate can, you know, take their own view on whether they want to miss their prime minister or not. Well, when he trades on his CV, which he does a lot and says, look, I've got this fantastic track record, I've done brilliantly in all these big jobs, you know, the actual record

is slightly different. He hasn't done that well. Well, Matthew Lin, financial columnist and author, you have sounded the alarm. The article is Canada is about to discover Mark Carney is the man with the reverse Midas touch. Will enough Canadians listen to you that that a fourth liberal government does not become a reality only time and only an election campaign will tell. But to you, sir, I say thank you for spending time with us on the Ben Mulroney show. Pleasure. Good to But to you, sir, I say thank you for spending time with us on the Ben Mulroney Show. Pleasure, good to talk to you.