They're better at it,

and they have scale and all that stuff.

And so what we do is we work, we do our thing, we get money, and then we can go and buy the things from other specialists.

So that's what trade is.

When it goes to an international level, it's still just people like you and me buying things from another country as opposed to from each other.

So there's nothing really fancy in that.

But that means we really understand it well.

But, you

And what about, I guess, as an extension to that, people who are looking at the price of oil and seeing kind of mixed impacts to that? Like, why is it that this contraction of supply, which has led to a punctuated increase in the price of oil, is having such a detrimental impact more largely to the growth picture?

Well, basically because it's very hard to adjust abruptly.

You could say, you know, you might think if oil prices were going to be $100, let's say forever, you might seriously consider an electric car next time you buy a car.

But you don't switch to an electric car this week.

This was the week you were planning to do it anyway.

But the point is you continue to have to put gasoline in your car and you need to still get downtown and so on.

And so you don't get to adjust.

What are your expectations? What would you want to see in there?

But what are the big accidents that could happen in the United States economy, which, to your point, is an anchor for the global economy?

So the big accident that's for me most preoccupying is the interaction between, uh, the high level of debt, h- rising level of debt, and the pressure to maintain a stable, uh, financial system.

So this is very similar to the ingredients that we had in the early 1970s.

Late '60s, early '70s, US fiscal situation was getting out of control.

The v- the war in Vietnam was becoming a serious burden.

And, uh, inflation was creeping up.

And, uh, there was pressure on the Fed at that time by the Nixon administration to try and, uh, keep interest rates low so that it would make it easier to finance the, uh, budget deficit.

With the midterm election coming up.

So from a policy point of view, how does that wrap in?

So you're touching on some really important issues for sure.

And first of all, yes, the social infrastructure, which is a pretty broad concept, not just roads and bridges, hospitals, but the number of doctors and all this is a huge strain when suddenly immigration outpaces the long established trend line that you've had.

And that's what happened to us.

So try to reset that as an appropriate thing.

And one of the casualties along the way has been housing, for sure.

You know, those folks come and they need a place to go.

But would you favor a guaranteed annual income? Can we change EI so that it just becomes a, what do we do with, there's going to be, again, talk about uneven or spiky, buckets and buckets of profit in these little narrow places and huge swaths of people that aren't really participating.

How dramatic might the impact at the pumps be? And will it largely just depend on how long this lasts?

Well, at the pumps, that's a fairly mechanical transmission there.

I'm more concerned about what's the underlying effect on the economy.

Rough and ready, $20 on oil, like say $60 to $80 would maybe add as much as a percentage point onto Canada's GDP that year.

As you just hinted, it's not spread around to everybody, but eventually it kind of does.

And so this could even be more if these sorts of $100 prices stick.

But the price effect could be on the order of half a point or a percentage point, depending on how the whole thing works its way through the system.

Yeah.

But in general, how bad would it be for the economy?

Pretty bad.

You know, we could probably do no better than those numbers the Bank of Canada circulated in their analysis, but others have done similar analyses.

They're sort of clustering around 5% pay cut for the economy as a whole.

It's pretty significant stuff.

It takes two years for it to reach that point, but I think the important thing to take away from that is it's permanent.

It kind of sounds like the economy slows down for a couple of years.

If we were to get rid of those barriers, and I don't purport to say it's a simple thing, but if we were, how much of an impact could that have?