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Interest rates: Going up.

Voter confidence: Going down.

On Wednesday, the U.S. Federal Reserve did something it hasn’t done in nearly three decades: It raised interest rates by three-quarters of a percentage point. That’s the biggest rate hike since 1994.

Anyone who thinks that the Bank of Canada won’t do likewise in July is dreaming in Technicolor. The only question is how much.

In recent months, the Bank of Canada has boosted its key interest rate by a half a point twice — moving the borrowing rate to 1.5%. For all of us who borrow — to purchase a home, or a car, or lines of credit, or credit cards, or student loans — those interest rate hikes have a meaningful and measurable effect on the bottom line.

Austrian economist Ludwig von Mises — who, tellingly, fled Europe to escape the advance of Nazism, and would go on to influence generations of economists — once said: “Public opinion always wants easy money, that is, low interest rates.”

But easy money is getting increasingly less easy to get.

Why raise rates, you ask? Well, the economy, as the experts say, was too hot. Inflation was higher than its been in decades.

Unleashed from the strictures of the pandemic, consumers started spending like the proverbial drunken sailors, pushing prices of just about everything up. Inflation — that is, a drop in the bang you get for your buck — was back, with a vengeance.

Inflation was made worse by factors that were myriad and multiple. Russia’s insane invasion of Ukraine. Supply-chain chaos. Labour and housing shortages. Rising prices. And fear of yet more rate hikes. As Joann Weiner, an economics expert at George Washington University, inexpertly observed: “It’s a pretty bad storm.”

For many politicians, rising interest rates — and rising inflation — can be existential. In the late ’70s and ’80s, the oil crisis, government spending, and higher prices ended many political careers — President Jimmy Carter and Prime Minister Pierre Trudeau among them. (Trudeau bounced back, but Carter never did.)

In Canada in the New Twenties, the dominant political issue is the cost of living. That issue, more than any other, is driving the political agenda, and causing no shortage of disingenuous finger-pointing.

Federally, the coming interest rate hikes will play an oversized role in the futures of Liberal and Conservative politicians. If the Bank of Canada overplays its hand, and pushes the country into recession, Conservative leadership frontrunner Pierre Poilievre — who has recklessly promoted InfoWars-style conspiracy theories about the central bank, and childishly called for its governor to be fired — will almost certainly benefit.

As Canadians grow angrier about the state of the economy, and as they feel more and more powerless about rising rates and inflation, Poilievre may reap the rewards.

Well, it isn’t. And it’s getting worse.

The late, great Alberta political guru Rod Love once said to me: “When the water dries up, the animals all start to look at each other funny.”

The water, along with cheap borrowing, is drying up. So too consumer — and voter — confidence.

We human animals may be edging closer to an economic and political drought. Who will thrive? Who won’t survive?

Because, make no mistake: Politically, not everyone will.

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Dear Alberta:

Yes: I was Special Assistant to that dastardly Liberal Prime Minister, Jean Chretien. Yes: I worked on the presidential campaigns of the two Democratic Horsepeople of the Apocalypse, Joe Biden and Hillary Clinton. And, yes: while I may have grown up in Alberta, I haven’t actually lived in Alberta for years.

So why should Albertans (generally) and UCP folks (specifically) listen to Yours Truly?

Well, listen or don’t listen. That’s up to you. But some tell me my campaign record ain’t entirely bad: I have helped win six majority governments, federally and provincially – and I helped secure 70 per cent of the vote in the last Toronto mayoral race, one of the biggest city contests on the planet.

Oh, and this: I love Alberta, and I enthusiastically support Western oil and gas. And I strongly feel that another Alberta NDP government is a bad, bad idea. Because Alberta New Democrats may claim to also support the province’s most important sector – but Alberta’s NDP is formally part of the federal NDP. And the federal NDP hates Western oil and gas.

So, the NDP can’t be permitted to form the next government in Alberta. How to prevent that?

Well, let’s look at how the United Conservative Party got so unpopular, shall we? Let’s examine why a sitting majority Premier was recently forced out by his own party, and why an Alberta NDP win remains a strong possibility.

There are four main reasons. One is this: Alberta has changed. The homophobic, xenophobic tendencies of some in the UCP have alienated urban Alberta voters – who are much more diverse and tolerant than some in the UCP are prepared to accept. So, the UCP needs a leader who attracts the support of Albertans of every colour, faith and sexual orientation.

Two: discipline – as in, lacking it. As Jason Kenney discovered the hard way, the discipline that was the hallmark of the Stephen Harper years, federally, has been sorely lacking in the UCP. Consultation with caucus, and respect for caucus, went out the window – and civil war broke out, big time. So, the UCP needs a leader who knows Harper-style discipline – but also Harper-style caucus management.

Three, knowing which fights to have with Ottawa – and which fights to avoid. Like it or not, energy is a shared jurisdiction between Ottawa and the provinces. It’s right there in the Constitution. That means finding a Premier who knows and understands Ottawa – but isn’t cowed by the federal Liberals, as Rachel Notley government would always be. A Premier who can go toe-to-toe with Justin Trudeau.

Fourth and finally: the UCP needs a winner. Danielle Smith is nice enough, but she did a secret deal with the Alberta Tories, and thereby blew apart Wildrose. Brian Jean is genial – but he loses more than he wins, and he has shown that he is better at division than unity. So, the UCP needs a leader who can win, and has a record of winning every election she has ever run in.

She? Yes, she, Alberta. Michelle Rempel-Garner.

Full disclosure: I know her. I like her. She’s a friend.

But, objectively, Rempel-Garner has what the UCP needs to win again. She fights for tolerance and diversity, and is better-aligned with modern Alberta. She was a senior Harper minister, and knows the value of discipline – and how to maintain it without alienating caucus. She knows the corridors of power in Ottawa because she’s been a longtime MP – but no one knows how to get under Trudeau’s skin better (trust me). Finally, she’s a winner in a way that Smith and Jean never were and never will be.

Will she run? No idea.

But she should.

Sincerely,

Warren

[Kinsella is a proud Albertan, and would still be there if the NDP hadn’t wrecked the place.]

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