Analysis of Liz Truss' Criticism of Mark Carney

Whatever happened to objective reporting?

From mainstream media, the challenge isn’t just accessing information but deciphering the political bias each outlet carries. Whether the bias leans left or right, the issue remains the same—they frame the narrative to support their ideological stance, often at the expense of an accurate representation of the facts.

Take, for example, The Toronto Sun’s interview with Liz Truss, former Conservative Prime Minister of the UK. In the interview, Truss exaggerates Mark Carney’s responsibility for Britain’s financial challenges, blaming him for policies that continued long after his departure from the Bank of England. While Carney’s tenure had lasting economic effects, the UK’s financial struggles are also the result of Brexit, Truss’s own failed economic policies, and broader global financial conditions.

As a conservative-leaning publication, The Toronto Sun amplifies Truss’s narrative, making the interview more of a political attack than a balanced economic analysis. This is not objective journalism.

The following is an analysis of The Toronto Sun’s interview with Liz Truss.

Key Claims & Their Validity

1. Carney’s Role in Quantitative Easing (QE) and Inflation

Claim: Carney oversaw excessive money printing (QE), which devalued the economy and caused high inflation.

Fact Check: Carney implemented QE in response to the 2008 financial crisis and Brexit instability. However, QE continued under his successors, including during COVID-19. Inflation in the UK rose sharply in 2021–2022, after Carney had already left office, due to supply chain disruptions, Brexit effects, and the Ukraine war.

Verdict: Partially misleading—Carney set the foundation for QE, but inflation was a multi-causal problem post-Carney.

2. Carney's Alleged Responsibility for Britain's Stagnation

Claim: Carney's leadership led to low economic growth, with UK GDP per capita stagnating compared to the US.

Fact Check: UK economic stagnation is more tied to Brexit and government policies than Carney’s central banking policies. The Bank of England is responsible for monetary policy, not economic policy, which is the government's job.

Verdict: Mostly inaccurate—Carney had influence, but stagnation is largely a result of Brexit and policy choices post-2016.

3. Carney’s Net Zero Policies & UK Energy Prices

Claim: Carney was a major proponent of Net Zero, which harmed the UK’s energy sector and led to record-high energy prices.

Fact Check: Carney promoted green finance, but energy price hikes were due to Brexit-induced supply chain disruptions, Russia’s invasion of Ukraine, and global oil market instability.

Verdict: Misleading—Carney promoted green finance, but energy price hikes were due to geopolitical and structural issues, not his policies.

4. Carney’s Influence on the 2022 UK Pension Crisis

Claim: Carney set a Bank of England culture that led to pension fund instability, which collapsed during Truss’s short tenure as PM.

Fact Check: The pension crisis occurred in September 2022, triggered by Truss’s own mini-budget, which caused bond yields to spike. The Bank of England intervened to stabilize markets, but the root cause was Truss’s unfunded tax cuts and market panic.

Verdict: Blame shifting—Truss's own budget decisions triggered the crisis, not Carney.

5. Carney’s Political Ambitions & Canadian Context

Claim: Carney wants to become Prime Minister of Canada, following a Davos/WEF-inspired globalist agenda.

Fact Check: Carney has expressed political interest and is involved with the Canadian Liberal Party, but he has not officially announced a leadership bid.

Verdict: Speculative and politically charged—Carney is politically active, but claims of him being "appointed" as PM are exaggerated.

Assessing Bias in the Interview

• The Toronto Sun is a right-leaning publication, and Brian Lilley is a known conservative commentator.
• The interview heavily promotes Pierre Poilievre’s conservative narrative, portraying Carney as a Davos elite with disastrous economic policies.
• Truss’s criticisms align with right-wing attacks on green policies, central banks, and international financial institutions.

Overall Conclusion

Liz Truss and the Toronto Sun frame Carney as a primary cause of Britain’s economic troubles, but this oversimplifies complex economic issues.

• Some criticisms (like QE concerns) have merit but ignore the broader economic context (Brexit, government policy failures, and global market forces).
• Many claims shift blame from Truss’s own failures (such as the pension crisis) onto Carney.
• Energy crisis and economic stagnation were not directly caused by Carney, though he supported Net Zero finance.

Final Verdict: Carney is not beyond criticism, but blaming him entirely for Britain’s economic struggles is misleading and politically motivated.

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Game Theory: An Analytical Perspective

I have changed the format of my posts from critiques to analyses of the world issues that face us. My analogy is that “life is like a chessboard” where we are all players trying to maximize our outcomes. These outcomes can be financial, spiritual, or anything else that gives us a sense of accomplishment.

One of the best tools I use to analyze these issues is Game Theory, initially conceptualized by John von Neumann. Later, John Nash developed the concept known as the Nash Equilibrium, which significantly expanded the scope of Game Theory. While von Neumann’s minimax theorem focused on two-player zero-sum games, Nash Equilibrium extended Game Theory to include non-zero-sum games and multi-player interactions. This advancement made the theory applicable to real-world scenarios where cooperation and competition coexist—such as in political science, psychology, biology, business, and computer science.

What is Game Theory?

Game Theory can best be explained as the study of strategic interactions among rational players, often under conditions of uncertainty, with the aim of maximizing their payoffs. This aligns with the core belief that “there are no absolutes, only probabilities that reside on a spectrum ranging from highly unlikely to very likely.”

Game Theory becomes a way of thinking that is not always intuitive. It is highly abstract, yet it is constantly evolving as new applications and insights emerge.

Below, I have included a glossary of game theory-specific terms to demonstrate that Game Theory goes far beyond the level of simple board games.

 

A

Adverse Selection: A situation where one party has more information than another, often leading to inefficient outcomes (e.g., in insurance markets).

Agent: A decision-maker in a game, often representing individuals, groups, or organizations.

Asymmetric Game: A game where players have different strategies, payoffs, or information available to them.

Auction: A game where participants bid for an item, and the highest bidder wins, with variations like English, Dutch, or sealed-bid auctions.

B

Backward Induction: Solving a sequential game by reasoning backward from the end of the game to determine optimal strategies.

Bayesian Game: A game where players have incomplete information but hold beliefs about unknown factors, represented as probabilities.

Best Response: A strategy that maximizes a player’s payoff given the strategies of other players.

Bounded Rationality: The idea that players have limitations in their ability to process information or make perfectly rational decisions.

C

Chance Node: A point in a game tree where an outcome is determined by chance, rather than a player's decision.

Chicken Game: A game where players face off to avoid mutual destruction, often illustrating the concept of brinkmanship.

Coalition: A group of players who collaborate to achieve a better outcome than they could individually.

Cooperative Game: A game where players can form binding agreements or coalitions to achieve mutual benefits.

Correlated Equilibrium: A solution concept where players coordinate their strategies based on a shared random signal.

Cost-Benefit Analysis: Evaluating the advantages and disadvantages of a strategy or decision.

D

Decision Node: A point in a game tree where a player chooses a strategy.

Discount Factor: A measure of how much future payoffs are valued compared to immediate ones in repeated or dynamic games.

Dominant Strategy: A strategy that yields a higher payoff for a player regardless of what others do.

Dominated Strategy: A strategy that always results in a worse payoff than another strategy, regardless of opponents’ actions.

E

Equilibrium: A state where no player can improve their payoff by unilaterally changing their strategy.

Evolutionary Game Theory: A framework that applies game theory to evolving populations, focusing on strategies that persist over time.

Expected Utility: The weighted average of all possible payoffs, where the weights are the probabilities of each outcome.

F

Focal Point: A solution or strategy that players naturally gravitate toward, often due to cultural or contextual clues.

Free Rider Problem: A situation in cooperative scenarios where individuals benefit from shared resources without contributing to their cost.

G

Game of Perfect Information: A game where all players know the entire history of moves and decisions made so far.

Game Theory: The study of strategic interactions where players make decisions to maximize their payoffs.

H

Hawk-Dove Game: A model of conflict where players can either compete (Hawk) or share (Dove), balancing aggression and cooperation.

Heuristic: A rule-of-thumb or simplified strategy used by players to make decisions when full rationality is impractical.

I

Imperfect Information: A game where players do not have full knowledge of all actions taken by others.

Information Set: The collection of decisions or events known to a player at a particular point in a game.

Iterated Game: A game played repeatedly by the same players, often with strategies evolving over time.

K

Knowledge Assumptions: The shared understanding among players about the game’s rules, structure, and other players’ rationality.

L

Learning in Games: The process where players adjust their strategies over time based on past outcomes or observations.

Loss Aversion: The tendency for players to prefer avoiding losses over acquiring equivalent gains.

M

Mechanism Design: The creation of rules or systems (a “game”) to achieve specific outcomes, often in economics or auctions.

Minimax Strategy: A strategy that minimizes the maximum possible loss for a player.

Mixed Strategy: A strategy where a player randomly chooses between multiple actions, assigning probabilities to each.

Moral Hazard: A situation where one player takes risks because another player bears the consequences.

N

Nash Equilibrium: A situation where no player can improve their payoff by unilaterally changing their strategy.

Non-Cooperative Game: A game where players make decisions independently without binding agreements.

Non-Zero-Sum Game: A game where the total payoff can vary, and players’ outcomes are not strictly opposed.

O

Opportunity Cost: The value of the next best alternative that is forgone when making a decision.

Outcome: The result of all players’ strategies in a game.

P

Pareto Efficiency: A state where no player can be made better off without making someone else worse off.

Payoff: The reward or outcome a player receives from a particular strategy or decision.

Payoff Matrix: A table that shows the payoffs for each player based on all possible strategy combinations.

Prisoner's Dilemma: A classic game showing how two rational players might not cooperate, even when it benefits both.

Q

Quantal Response Equilibrium: A solution concept where players choose strategies with probabilities that increase with the expected payoff.

R

Rationality: The assumption that players will act in their best interest to maximize their payoffs.

Repeated Game: A game that is played multiple times, allowing players to develop strategies over time.

Risk Dominance: A strategy that is safer or less risky when there is uncertainty about other players' choices.

S

Shapley Value: A solution concept in cooperative games that fairly distributes payoffs based on each player’s contribution.

Stackelberg Competition: A model of market competition where one firm (leader) moves first, and the other firms (followers) respond.

Strategy: A plan of action a player follows in a game to achieve the best possible outcome.

Subgame Perfect Equilibrium: A refinement of Nash Equilibrium applicable to games with a sequential structure.

T

Tit-for-Tat: A strategy in repeated games where a player replicates the opponent’s last move, often used in cooperation scenarios.

Transferable Utility: A property of some cooperative games where payoffs can be redistributed among players without loss.

U

Ultimatum Game: A game where one player proposes a division of resources, and the other player accepts or rejects it.

Utility: A measure of satisfaction or payoff a player receives from a particular outcome.

V

Value of Information: The benefit a player gains from acquiring additional information before making a decision.

Von Neumann-Morgenstern Utility: A utility function that satisfies the axioms of expected utility theory.

W

Weak Dominance: A strategy that performs at least as well as another strategy in all scenarios and better in at least one scenario.

Winner’s Curse: The tendency for the winning bidder in an auction to overpay due to incomplete information.

Z

Zero-Sum Game: A game where one player’s gain is exactly balanced by the losses of other players, making the total payoff constant.

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Profiting from Power: Trump's Financial Moves in Office

By J. André Faust (Jan 23, 2025)

President Donald Trump's recent ventures into cryptocurrency, including the launch of meme coins such as $TRUMP and $MELANIA, as well as the establishment of a cryptocurrency working group through an executive order. These developments have raised ethical concerns among watchdogs, who argue that Trump appears poised to benefit financially from his presidency in new and potentially lucrative ways.

Ethics experts have expressed apprehension that Trump's direct involvement in cryptocurrency ventures could lead to conflicts of interest, especially given his administration's role in regulating the crypto market. The launch of these meme coins has been particularly controversial, with some analysts labeling them as speculative and opportunistic, lacking intrinsic value. The rapid appreciation of these coins has further intensified scrutiny, as it suggests potential for significant personal financial gain for the President.

Additionally, the executive order establishing a cryptocurrency working group has been viewed by some as a move that could disproportionately benefit Trump's personal crypto ventures. The order's directives to explore the creation of a national cryptocurrency stockpile and to propose new regulatory frameworks have led to concerns about the potential for policy decisions that could favor the President's financial interests.

In summary, This highlights the ethical debates surrounding President Trump's recent cryptocurrency initiatives, reflecting concerns about potential conflicts of interest and the propriety of a sitting president engaging in ventures that could result in personal financial gain.

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Sources:

BBC News. (2025). Trump launches cryptocurrency, raising ethics concerns. Retrieved January 23, 2025, from https://www.bbc.com/news/articles/c98y47vrv2jo

The Times. (2025). If lawless crypto wins, so do the billionaires. Retrieved January 23, 2025, from https://www.thetimes.co.uk/article/if-lawless-crypto-wins-so-do-the-billionaires-7g3wkqbcd

MarketWatch. (2025). Trump has called himself a 'crypto president.' Here's what his new executive order does. Retrieved January 23, 2025, from https://www.marketwatch.com/story/trump-has-called-himself-the-crypto-president-heres-what-his-new-executive-order-does-91c6394b

The Atlantic. (2025). The crypto world is already mad at Trump. Retrieved January 23, 2025, from https://www.theatlantic.com/technology/archive/2025/01/donald-trump-crypto-billionaire/681388

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High-Stakes Bargaining: Trump's Tariff Ultimatum Through Schelling's Lens (Game Theory)

By J. André Faust (Jan 20, 2025)

President Trump's recent announcement to overhaul U.S. trade policies, now coupled with the explicit threat of 25% tariffs on Canadian and Mexican goods by February 1, can be analyzed through the lens of Thomas Schelling's The Strategy of Conflict, which delves into bargaining, communication, and limited war.

Strategic Communication and Signalling

Schelling emphasizes the role of communication and signalling in strategic interactions. The addition of a firm deadline and explicit tariff threat changes the nature of the signalling dynamic:

• Demonstrating Immediate Resolve: The deadline underscores the administration's commitment to escalating trade reforms if demands are not met.
• Eliminating Flexibility: By setting a firm date, the U.S. reduces room for negotiation and signals a willingness to escalate further if necessary.
• Increasing Psychological Pressure: The looming 25% tariffs create urgency, forcing Canada and Mexico to reassess their strategies and potentially offer concessions.

Tacit Bargaining and Focal Points

Schelling discusses how parties often engage in tacit bargaining, where actions and statements serve as indirect negotiations. In this scenario:

• The February 1 deadline becomes the new focal point, concentrating efforts to avoid the threatened tariffs.
• The explicit threat removes ambiguity, pressuring Canada and Mexico to respond decisively.

Limited Retaliation and Controlled Escalation

The 25% tariff threat represents a significant escalation in the U.S.'s strategy:

• Escalation Initiated: The explicit tariffs signal a move beyond controlled signalling to a potential trade conflict.
• Risk of Retaliation: Canada and Mexico may respond with their own measures, potentially triggering a trade war.
• Strategic Leverage: While bold, this move risks long-term relationships if perceived as overly aggressive.

Implications for Canada

For Canada, the stakes have increased dramatically. Recognizing the strategic underpinnings of this threat is essential:

• Urgent action is required to either negotiate favourable terms or prepare for retaliatory measures.
• Aligning with Mexico to form a unified response could strengthen bargaining power.
• Misjudging the U.S.’s resolve could lead to significant economic consequences.

In summary, applying Schelling's insights reveals that President Trump's escalatory tariff threat transforms the dynamic from strategic signalling to high-stakes bargaining. The explicit deadline and severe tariffs serve as a calculated move to influence Canada's and Mexico's actions while leaving little room for misinterpretation. Remember Game Theory is based on probabilities, what is least likely to most probable. The million dollar question is if he doesn't modify his tariffs what are the chances that a trade war will take place between the two countries.

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Reference

Schelling, T. C. (1960). The strategy of conflict (pp. 53–80). Harvard University Press.

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History in the Making or Repeating? The Perils of Trump’s Protectionism

 By J André Faust  (Jan 19, 2025)

The Smoot-Hawley Tariff Act (officially the Tariff Act of 1930) was a U.S. law enacted on June 17, 1930. Sponsored by Senator Reed Smoot (R-UT) and Representative Willis C. Hawley (R-OR), it raised tariffs on thousands of imported goods to historically high levels. While it was initially intended to protect American farmers and industries from foreign competition in the wake of declining agricultural prices, it ended up having far-reaching negative consequences for both the U.S. and the global economy.

1. Context and Motivations

• Agricultural Decline: American farmers had already been struggling throughout the 1920s due to falling crop prices and overproduction. Legislators believed raising tariffs on agricultural imports would help farmers compete and recover.
• Great Depression Onset: The stock market crash of 1929 deepened economic woes, increasing political pressure to protect domestic industries and jobs. Protectionism seemed, at first glance, like a way to bolster American businesses at home.
• Widespread Opposition by Economists: Over 1,000 economists signed an open letter urging President Herbert Hoover to veto the bill, warning that it would stifle international trade and hurt the U.S. economy in the long run.

2. Main Provisions

• Significant Tariff Increases: The Act raised tariffs on thousands of products, including agricultural items and various manufactured goods. In some cases, tariffs rose to levels that effectively priced foreign goods out of the U.S. market.
• Trade Policy Shift: Smoot-Hawley marked a shift away from the relatively more open trade policy of the 1920s, setting the stage for retaliatory measures from other nations.

3. Immediate Effects

• Retaliatory Tariffs: Countries such as Canada, France, and others responded with tariffs on U.S. exports. As a result, American farmers and manufacturers found it harder to sell products abroad.
• Decline in Global Trade: The Act contributed to a rapid decline in international trade. Although the Great Depression had multiple causes, the sharp rise in tariffs and subsequent retaliation exacerbated the global economic downturn.
• Economic Isolation: Higher tariffs diminished opportunities for global cooperation and trade, reinforcing a trend toward economic isolation among major industrialized nations during the early 1930s.

4. Longer-Term Consequences

• Deepening the Great Depression: While not the sole cause of the Great Depression’s severity, Smoot-Hawley is widely regarded by historians and economists as intensifying the crisis by shrinking world trade and aggravating financial instability.
• Shift in Trade Policy: Over time, the negative experience with protectionist policies led to a major shift in U.S. trade policy. By the mid-1930s, President Franklin D. Roosevelt’s administration began negotiating reciprocal trade agreements to lower tariffs and encourage international commerce.
• Lessons for Policy: Smoot-Hawley remains a textbook cautionary tale about protectionism. Economists and policymakers often cite it as an example of how raising trade barriers can cause significant economic harm, especially during periods of global financial stress.

5. Legacy

• Changed View of Tariffs: The negative repercussions of Smoot-Hawley influenced future generations of leaders to seek more cooperative trade policies, culminating in multilateral trade arrangements after World War II (e.g., the General Agreement on Tariffs and Trade, later the World Trade Organization).
• Cautionary Example: Discussions about protectionist measures often reference the Smoot-Hawley Act to highlight the dangers of triggering trade wars and isolating domestic industries from global markets.

In Summary

The Smoot-Hawley Tariff Act of 1930 was a protectionist measure born out of efforts to shield U.S. farmers and industries during an economic downturn. Instead, it provoked retaliatory tariffs from trading partners, contributed to a collapse in international trade, and worsened the global depression of the 1930s. Its legacy endures as a strong argument against aggressive tariff hikes and isolationist trade policies, especially during economic crises.

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Canadians Idolizing Donald Trump Defies Logic

 

 

  By J André Faust (Nov 19, 2024)

 

Why Do Some Canadians Support Donald Trump?

Why do some Canadians support Donald Trump when the potential imposition of 10% to 20% across-the-board tariffs by the United States under his leadership could have devastating repercussions for the Canadian economy? Approximately two-thirds of Canada's exports are destined for the U.S., making our economy deeply intertwined with theirs.

These tariffs would likely drive up the cost of Canadian goods in the U.S. market, reducing demand and delivering a severe blow to Canadian industries reliant on exports. Analysts have already raised alarms that such a move could trigger a recession in Canada, disrupting trade flows and destabilizing our economic foundation.

The impact wouldn’t stop there—it would hit the Canadian oil industry particularly hard. Provinces like Alberta, Saskatchewan, Newfoundland, and Labrador, which depend heavily on petroleum exports, could experience crippling economic downturns. Canadian oil would become less competitive in the United States, our largest buyer, which currently accounts for nearly all of our crude oil exports. With tariffs in place, American buyers could easily pivot to domestic or other international suppliers, leaving Canada to bear the brunt of the loss.

I fail to understand the logic behind admiring a would-be president who shows such blatant disregard for Canada. Trump does not give a rat’s ass about our economy or the devastating domino effect these policies could have on our entire country.

Conclusion

The potential for tariffs under a Trump-led U.S. administration highlights the vulnerability of Canada's trade-dependent economy. Such policies could wreak havoc on industries like petroleum, driving regional and national economic instability. While free trade agreements such as the USMCA offer a framework for collaboration, the review scheduled for 2026 adds uncertainty to an already precarious relationship.

It is imperative for Canadians to critically assess the economic and political implications of U.S. leadership choices. Supporting a leader who threatens the core pillars of Canada’s economy seems counter-intuitive, particularly when the consequences could reverberate across the nation. The need for robust, strategic responses to safeguard Canadian interests has never been clearer.

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