The economy is in recovery, the financial world has survived its greatest test since the 1930's, at least that's what all the pundits on most media outlets are proclaiming. I don't necessarily believe that history repeats itself, but I am suspicious of the sales pitch that we are getting right now (because there is still huge amounts of cash around the world sitting on the sidelines waiting for the second shoe to drop). In the Great Depression the first market crash was followed by a recovery of similar proportions to what has happened since March 2009. But government interventions in the 1930's prolonged that recovery resulting in World War II. We may now be in a similar situation. The market tinkerers especially in the United States will soon be required to unwind there positions without upsetting the applecart. All countries where market interventions were large will be doing the same thing, the trick is timing. Its hard to imagine the arrogance of these guys. Few of them foresaw the extent of the market crash in 2008, most "experts" predicted a short and shallow recession. Yet now, these same experts know exactly how to fix things and can predict the consequences of their actions. They are smarter than all the millions of investors around the world and everything will be fine. Yeah right!
In Canada, Prime Minister Harper issued a "stimulus report card" yesterday proclaiming that things are just hunky-dory and he's doing a wonderful job. Two recent articles in the Globe and Mail cast some doubt on the possibility that a recovery can be controlled. Preston Manning wonders how long it will take to recover from the stimulus, and Gwyn Morgan wonders why governments fail to learn from past mistakes. Free-market capitalism is not the cause of the financial crisis as Morgan points out, and has lately been popularized in a movie by Michael Moore. In fact, recent elections in Europe are not supporting socialist ideals as may be expected due to the Great Recession. Even in Canada polls show there is no rush to support the Liberals or NDP. Maybe people aren't fooled, maybe not. Are we out of the woods, or have we just come to a clearing in the forest? Time will tell.
Saturday, September 26, 2009
A Bill in the Canadian Parliament will be introduced soon that will change the number of seats in the House of Commons from 308 to 342. All of the additional 34 seats will come from Ontario (21), Alberta (6) and British Columbia (7). The rest of the country remains unaffected. This change will go some of the way to repairing the gross underrepresentation of these provinces while at the same time bloating the size of parliament. An interesting article by Brian Lee Crowley called "How rep follows pop - and what it means for Quebec", discusses how this change may be the beginning of a Canadian transformation away from the socialist economic and social policies that have catered to Quebec for the past 50 years.
Friday, September 25, 2009
In a surprise announcement this morning the Mayor of Toronto David Miller, said he would not seek a third term. Citing family reasons for not running, Miller proclaimed that he had accomplished all he wanted to do to get Toronto on the right track. The political reality is that polls have shown him far behind possible other candidates which would make fund raising difficult with the election just over a year away. The garbage strike in the midst of the Great Recession showed everyone for a moment what it means to support union "rights" at the expense of taxpayer expectations. The disclosure yesterday of a $200 million error in the "sick bank" account (coincidence?) makes Miller look like he was hiding facts from everyone to favour the unions. Miller will serve out the rest of his term as a lame duck, possibly positioning himself for Michael Bryant's old job as CEO of Invest Toronto which he has taken over. Doing two jobs by a lame duck, isn't bureaucracy wonderful?