Economy flying high in spite of those in charge

I like the image of a plane when describing the economy. Even better: A plane flying to Hawaii. There’s no better imagery in the month of January. 

In this metaphorical plane there are pilots, but it's basically flying itself – controlled by computers much more sophisticated than any human brain. The captain can adjust course if need be, much like the Governor of the Bank of Canada or the Chair of the U.S. Federal Reserve, but for the most part, they’re limited where they can steer the thing. If the plane is destined to go to Hawaii, they’re not going to veer off to the Philippines.  

They can, however, change the plane’s speed. Just like a real captain can speed up or slow down a plane, those in charge of the central banks can raise or lower interest rates. A rise in interest rates means the plane is going too fast. You might get to your destination too early, or worse yet, burn excess fuel. That’s costly. Time to step on the brakes. 

Alternatively, they can cut interest rates when the economy’s sputtering. This means the plane is going too slow. Perhaps it's up against some strong headwinds and needs a little extra oomph to get to its destination on time. 

The co-pilot in this analogy is like the head of government: the president or prime minister. I’ll refer to this person in the masculine, but let's be clear, many of us would prefer a woman. 

The co-pilot (think Trump or Trudeau) is a bit of a joke. He tends to look out the window most of the time, thinking this will give him a better idea of where they are or should be. But make no mistake, he has no idea. He might view a cloud formation as an oncoming storm, when really it’s just a fluffy pod of moisture. 

The co-pilot does most of the communicating with the passengers, however, which gives him a false sense of authority. He tells them that the weather is great at their destination and everything is going just fine. And if things aren’t fine, he’ll tell them they're pretty good anyway.

“Hello, everyone, this is your co-pilot speaking. If I could distract your attention for a moment from the flames coming from the left side of the plane, you’ll notice a beautiful, dynamic view of the Pacific coastline on your right.” 

The co-pilot also relieves the captain during meals and washroom breaks, at which time he may make some adjustments of his own. He’ll fool around with the controls, speeding up the engine when they're already going too fast, or veering too far to the right when the plane simply needs to go straight. Governments, you see, like to pump up the economy at the worst of times, like when the economy is already doing well, and cut back on spending when the economy is about to nose-dive. It’s the exact opposite of what the captain would do, but he allows his co-pilot this false sense of importance. Like I said, he needs his washroom breaks. 

For the most part, though, the plane hums along with little to no intervention from either of the pilots. This heaving hunk of metal rises high into the sky, almost like magic, while they chomp on their peanuts and pretzels. 

It’s when the plane stops humming – when they begin to hit some turbulence – that the pilots pretend to spring into action. This is when the economy enters what is known as the R-word (don’t say it out loud – a recession). 

Most of the time it’s not the end of the world, but the co-pilot tells you calmly to put your seatbelts on anyway. “It’s just a little turbulence,” he’ll announce. “Continue watching your inflight entertainment. And remember, the weather in Hawaii is beautiful.” 

At this point, some people get the jitters and begin to grip their arm rests with the strength of a gorilla. They’re usually the ones in first class. Those in economy (no pun intended) don’t understand what’s going on until someone flies up in the air and hits his head on the ceiling. That’s when the panic sets in. 

Typically, even in the worst economic storms, no one actually dies. The pilots get their passengers to the destination, albeit battered and bruised.

Spending your vacation in recovery isn't pleasant though. The passengers who can still walk will sneer at the flight crew as they exit the plane – cursing, crying, and claiming they’ll never travel with them again. 

But they will, because they have to. There’s no other way home.