Tuesday, 16 May 2017

Looking back to 1975 and wage-and-price controls

What would Pierre Trudeau think about huge leaps in the sale prices of homes?

Most of my years as a youth included Pierre as our prime minister

By Mark Schadenberg
Since we have Trudeau as our Prime Minister, now is a great time to re-introduce wage-and-price controls as was a proposed economic plan of the 1970’s – as initially introduced or suggested (the brain child) by the Conservative party under leader Robert Stanfield.
The Pierre Trudeau of that era was opposed to the idea originally, but then modified its principles and moved forward with the idea.
In 2017 could it be a good idea now?
Within reason and understanding season fluctuations, prices would not be permitted to rise more than the average wage increase.
Is it possible? Is the average cost of a roof over your head (your residence in any form) tied directly to supply-and-demand, or rather the inflation rate. Rising house prices certainly creates inflation in the overall analysis of economic statistics and the overall picture. At the same time, the huge number of residential transactions over the past 18 months in Oxford County would indicate only good news for furniture stores, hardware stores, and appliance warehouses. 


Yes, at 50 years young I’m old enough to remember the Liberal Party philosophies of stopping any attempt to control spiralling inflation in an era before the crazy high interest rates of the early 1980’s, which I do not remember as I was not home owner until the 1990’s.
After the 1974 federal election, inflation continued to rise due to the OPEC oil scare / shortage, so Pierre Trudeau did eventually introduce limited wage-and-price controls (Anti-Inflation Act of 1975), but only in certain segments of the economy. For example, federal employees or anyone working for a company with more than 500 employees would have wage increases connected to the rate of inflation.
Could this work today with spiralling inflation in home prices?
Your thoughts?



I realize you would have to look back at that old hardcover about Pierre Trudeau on your library shelf and recall terms like True Dough.

My related post about the skyrocketing increase of about 30% in market value for homes in Oxford accompanies this entry.
By the way, since I essentially grew up in the Trudeaumania years, I have an admiration for Pierrre Trudeau. One graphic posted here includes a list of his many accomplishments, including the Constitution.




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