Case in point is our current prime minister, who in large measure was elected because of his impressive resume and economics training (Oxford PhD in economics, governor of Bank of England and Bank of Canada) and how that experience and knowledge was assumed to guide Canada through the troubled waters of the Trump presidency. Unfortunately for Canadians, Carney has proven the rule that when economists enter politics, they forget their economics and become politicians.
The most poignant example of politics overtaking economics for Prime Minister Carney relates to his government’s energy policies. Carney and his energy minister have been adamant that increasing costs through mandated carbon capture and a higher industrial carbon tax will make Canada’s energy sector more competitive.
Canadian oil producers and distributors don’t get to set their prices; we're what economists call price takers.
A recent study, which examined both the costs of carbon capture and the new higher industrial carbon tax, concluded it would increase the costs of Alberta oil by 19.6 per cent and natural gas by 39.1 per cent, and render Alberta uncompetitive.
And there’s the more recent announcement by Carney and British Columbia Premier David Eby on a bailout of condo developers in B.C.
Someone holding a PhD from Oxford should understand the layers of problems with the announcement. First and foremost, economists worry about incentives and how they influence our decisions to work, save and invest, be entrepreneurial, and take risks such as starting a business. The Carney-Eby announcement essentially indicated that private firms could take risks and if they’re right, they profit, but if they’re wrong, they can go cap-in-hand for bailouts from governments.
The incentives for privatizing profits and socializing losses through governments are terrible. They encourage private firms and even entrepreneurs to take excess risks and approve ill-advised projects because they assume they’ll be bailed out by governments.
In introductory economics, students learn about “moral hazard,” which basically refers to situations wherein one party takes on risks knowing they won’t bear the full costs of failure because government will absorb costs.
https://www.todayville.com/when-an-economist-is-no-longer-an-economist/
Incidentally, neither of Alberta's promised new pipes, one to the BC coast nor replacement of Enbridge Line 5 to Sarnia Ontario have any private enterprise onboard with cash available.