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*WH1TrBY FREE PRESS, WEDNESDAY, NOVEMBER 14 1M8, PAGE 7. PAGE SEVEN, '~~1 1) DUMP CROW NOW Last week, while the U.S. Federal Reserve was lowering its prime rate by a quarter to 10.00, the Bank of Canada go- vernor, John Crow, was still pushing our rates upward in bis quest for zero inflation. To Crow, inflation is the original sin. 1. Is inflation as evil asý he thinks? 2. Even if it is, is it any more harmful than the'high interest rates he's using to fight it? and 3. Are there better ways to flght inflation? The leaders of the free world's central banks learned their business in the double-digit inflationary seventies and they're determined te, prevent it from happening again. Four per cent, the level Canada chose for its wage and price controls, was considered good in the seventies, -but now, the moneta- rists think that's way tee bigh. In the early eighties, they drastically over-reacted to a slight increase of inflation and threw the western world into the worst. recession since the thirties; but instead of recognizing their error, they congratu- lated theinselves on wrestling the. dragon to the ground. Inflation may not be nice but people don't lose their jobs because of it. Recession is a far greater eviL. The trouble with Crow, who was born and educated in England, is that he has little understanding of Canada. He came here via Washington in 1972 and bas holed up in the ivory tewerof the Bank of Canada ever since. Wbat he fails te see is the special needs our economic diversity creates. Canada bas'unique problems. We are the second largest country in the world. We have beavily industrialized areas, resource-based single industry towns and virtually empty hinterlands. Only a bandful of counitries have a comparable diversity - the Soviet Union and China come te mind but neither bas a free-market economy. Amongst western coun- tries, only two migbt be considered comparable - Sweden whicb bas a beavily industrialized soutb and a subarctic hin- terland but only about a twentieth the area, and Australia, a bit smaller tban Canada with only abou t half the population. s - .None *of teear onCrow's -stomping grounds. His 'circleis the top bank ers of the G10 nations with whom be meets ten times a year. None of the G10 bas even the remotest resemblance te Canada. Ours is not a single economy - the fishing villages of the East coast bave as much in common witb Bay St. as a codfisb with an ingot of red-bot steel. Using high interest rates to figbt inflation in central Canada is simply driving farmers and fisherman in the rest of Canada into bankruptcy. The chief economist of the Bank of Montreal suggested a few weeks ago that Crow would not be satisfied that inflation was licked until unemployrnent reacbed nine per cent. From past experience, that means 20 per cent in the maritimes. If you tbink confederation bas problems over Meech Lake, it is beading for even worse problems because of John Crow. The blindness of tbe high interest rates is that tbey create the very inflation they try te flght. Ottawa needs desperately te cut tbe national debt, but the higiier interest rates are, tbe more it costs to service that debt, the more taxes they have te collect and bence the greater inflation. A drop in rates te the U.S. level would save the government more than $6 billion. Higb interest rates relative te the U.S. also force up tbe value of the Canadian dollar whicb makes Canadian exports less competitive. Just when Canadian companies are suppo- sed te be gearing up for the more competitive environment of free trade, the Bank of Canada is raising their prices abroad. But the worst indictmnent of high interest rates is the fact that tbey aren't working. Inflation is not dropping. Curing inflation with high interest rates is like kllling files with a shot gun - there's a lot of damage and very few dead flies. It's more effective te fix the hole in the screen. Specific targeted measures like wage. and price controls may not be particularly palatable but they do work. Perhaps there are other ways as well, such as the variable sales tax I proposed a couple of months back. Continued high interest rates will indeed create nine per cent unemploymnent which will almost certainly put us inte a another recession. Such an increase of 2 per cent unemployment will cost Ottawa an additional $4 billion in unemployment insurance and lost tax revenue which will lead te still higher taxes, higher inflation, etc., ,etc. That $4 billion plus the $6 billion the government is already losing through high interest rates is a heck of a price te put on one man's head. There aren't many bureaucrats with that much power and none with the immunity that tbe Bankof Canada governor enjoys. It is sheer lunacy that in a CONSTRUCTIG THE SANITARY SEWERS ON BROCK STREET NOKI'H, 1914 These motorized tractors used in building the sewer systm, on., of the flrst in. Ontario, are parked north of the Four Corners. James E. Willis, the mayor who installed the sewers% was defeated in the 1915 élection because it was feit he spent too much money on the system. Whltby Archlvo photo 10 TZARS AGO from the. Wednsay ovember 14, 1979 edition of the W y REZPRESS " Henry Hawks bave won the Senior COSSA football championsbip by Uxbridge Tïgers by 22-13. " Wbitby's population is 32,952, an increase of nine per cent over 1978. " The results of the Fr.. Pr... bus survey are 769 in favor and 20 oppose&. " Cullen Gardens and Miniature Village is under construction and due to, 1980. dýefeating the open in May, 25 TZARS AGO from the. Thursday, November 12,1964 edition of the WHJ'IY WEEIKLY NEWS " Mrs Frances Jackson, a resident of Fairview I.odge ince 1957, celebrated ber looth birthday on Nov. 7. "*-Craig Ziedfier and Strong, of Peterborough, will b. the'architects for the Whitby General. Hospital. " Local business men are expressng concern over proposedi high rise apartments in the downtown core preventing commercial expansion. " Four outdoor êkating rinka will be constructed in Whitby thii winter. 75 YEARS AGO from the Thursday, November 12, edition of the" WHrMY GAZITE AND CIERONICLC *Composite Lodge held a Masonie banquet and patriotic night on Nov. 6 *Whitby's new sanitaiy sewer system will begin operation this winter. *A meeting will be held at the Armories on Nov. 16 to orgaize a Home Guard& for Whitby. A mas meeting of the school children cf Whitby was held in the Music Hall on Nov. 8 to celebrate World Temperanoe Day. ui t tt P: 1 1 .w% à 9 . i ý! t' - . m ri - 1 w 144tl tz totatjtjL