PAGE SEVEN M SINKING DINTE E WHILPOOL John Crow has ciscovrod in the Iast few weeks what I (and plenty of others) have beon writing about for soveral months - interest rates (monetary policy) are no way te contrai, an economy. Having finally concluded that the economny had slowed down sufraciently that ho could let interest raise ease a bit, ho discovered (surprise, surprise) that in the open global economy, Canada lias only limited control over its own montary affars - foreign (and domestic) currency. * speculators can and did sond the value of aur dollar inte a swan dive, and only jacking interest rates bacte and beyond their previous levels stenimed the tide. Thon last Friday, a few chance romarks by the Prime Minister that interest rates would again easoe t sorte indeterminant time ini the future was onougli te start the slide again. What should have been clear long ago is that the international money markets have far more control ovor aur currency than we have domestically. They read the semee statistical reports that the Bank of Canada reada and they don't like what thoy ses.. Hgh interest rates have solved nothing and we are now just that much dooper inte the eonomic morass. The hall is right hack inte Michael Wilson's court where it belonged in the first place - fiscal policy (spending and taxation) has te stay in step if monetary policy is te mean anything. WILSON HAS TO CLIT SPENDING. But now that the crisis is upon us, the cuts will ha the quick and dirty kind instead of well-planned te achieve long termn goals. The conservative goverrnent, already more unpopular than any previous governiment in power, is in a corner from which it may nover emorge. In the short terni its options are extremely narrow and univérsally unpopular. Its first option is te massively raise taxes. That wouid virtuallY ensure that tho simmnering tax revoît over the GST would ho off and running that much sooner. Its second option is te, massively cut spending but the only areas where immediate savings couid ho realized would ho social programns and defence. Cutting social programa would also lead te a public revoit. So many peopîe are so dependent on it that cutting programas like unemployment insurance would produce a rash of boan and mortgage defaults such as those that sent the Aberta economy inte a taiispin ton years ago. Cutting pensions and medicare wouid re-ignite the grey power movemont that forced the govermnent ta hack down once hofore. Cutting transfer paymonts te the provinces would further fuel the separatist flames ini western Canada and Quehec. Whatever cuts the goverament makes in these areas, the pressure will ho on the provincial govrrinents ta find the money te fili the gap. If they don't, the hread linos of the thirties wil ho back in business. (People won't ho riding the rails though because there aren't enough of thom left.) The only reaaonabiy popular cuts that the governmont could make right now would ho dofence spending - so expect the dofenoe budget te ho cut in haif over the noxt two years with our troops out of Europe in six months. But stili, that won't ho enougli. The third option (and oniy a partial option) is te lot interest rates go down -and lot the dollar do whatever speculaters want it te do. Mst of aur debt is hold hy the Canedian public and our own financial institutions, so cutting interest rates wouid reduce the cost of sorvicing the -national debt hy soveral billion dollars. A dovalued dollar would ho good for aur export industries, but would increase the cost of imports which on paper wouid increase inflation. Inflation is something that woere a familiar with - wo see it et the grocery store aimost every week. But what John Crow regards as inflation is the figure that Statacan produces once a month. It is calculated from a huge range of averages collected from every sector of the economy. It is, in other words, simply a number. And increasing the cost of importa would simply ho a raali part of that number. Hopefuliy, more expensive imports wouid increese the use of Cenadian-made products but that wouldn't enter inte the Statacan figures - at least not immediately. Logic shouid have dictatod long ago that iower interest rates and a lower valued dollar would ho good for Canada. Money speculators are the parasites of the global economny and how they react te aur econoniic initiatives in tho short- 1 125 YZARS AGO from the Thursday, February 9,1865 edition of the wHITDY CHIRONICLE " Sleighing parties from Oshawa stop at Whitby's Rayai Hotel for refreshmen&. " A meeting wes heid in Whitby ta, ask the Ontario County Council toa prahibit the sale of liquor in the county. " Students at School Soction No. 4, Whitby, presentod their teacher William I. Dundas with a book of Longfellow's poems and an aiddress. *Reciprocity (Fr.. 'frade) hotween Canada and the United States lbas hoon cancelled. Il ONTARIO LADIES" COMMEE STUDENTS AT CONVERSAZIONE, FE&. 1908 Theso girls are dressod in their -finest for the biggest social evont of the year et the Callege. Young mon from Toronto came to Whitby by train ta promenade with the Collego students. Dancing was considered unladylike at that time. WhItby Arddveg phoo 10 YEARS AGO from tho Wednesday, February 13, 1980 edition of the WHrmBY FREE PRESS " Councillor Joe Drumm says Town Council is pushing Brooklin's growth at secret meetings " Cedrickes Dining Lounge is opening on Feb. 20 in the building north of the Rayai Hotel. " A $7,000 town grant will pravide a socurity system at the Witby Arts Station Gallory. " The Regional Social Services Committee says Fairview Lodge neoda $1 million worth of improvements. 25 YEAIRS AGO from the Thursday, February 11, 1965 edition of the WHITY WEEKLY NEWS * Héavy reins and fr-ozen ground are causing fiooding in Whitby. * he senior and junior Brasa Banda are entored in the Ki.wanis Munic Festival on Feb. 13. *Four hundred people attended St. MarWs United Church's first familyar. * ho Rainbow Rtfaurant advertises home made apagetti for 85 oents3,cili con carne for 55 cents and barbequed chicken for 99 cents a quarter. 1 m