Patience, Time and Rebooting Our Canadian Economy
Rebooting the financial system? How about shovel-ready? Have I learned the real life 2009 zingers? What will it be next week, “muddy wader economics?” Call it what you will, the recession of 2009 continues to fuddle the minds of many an economist.
We are now down to 1997 levels on the stock market. What’s that mean? For many of you with mutual funds, it means the last 12 years have been for not in terms of wealth creation. The problem is even for folks who don’t have any money in the stock market, much of the rest of the economy reacts in concert with it. Fifty cents says I know what’s going to happen next.
Needless to say, I’ve only got my 2 cents to add in. Of course everybody is a smart guy now. My shovel has been ready since the last snowstorm, but I don’t get paid for shoveling snow. I don’t have any muddy waders, but many people call me an economics writer. So that leaves me trying to explain away a “rebooting of the financial system.”
First of all, let’s explain that almost retro-term “rebooting”. The first time I ever heard that word was in 1986. I had learned computers in the early 1980′s but wasn’t really interested in them. However, in 1986 I found my self in graduate school at the University of Guelph and I had to once again learn about computers. This time computers seemed to be so ubiquitous, everybody was using them. So I threw myself into them, and c/ by every c/, I painstakingly entered the computer world.
The problem was the smart guys in the computer rooms kept talking about the “boot disk” and “rebooting”. Of course they would never explain to you what that was, only look at you like you were some type of prehistoric idiot if you didn’t know. However, I soon learned what “rebooting,” meant was starting up the computer, from the system disk, which back in those days was MS-DOS. Invariably it would fix any short-term malady, which the computer had, and everything would work.
The only problem in 2009 nobody has really tried “rebooting” the entire financial system. However, that in fact is what would be good for the system. However, the only problem is 4 billion people on this earth have a stake in how good the global economy is. When you reboot a computer it goes off for a minute before jumping back to life. There is no way we can shut this world off even for a moment. Handling the economic lives of real people has its challenges.
Into this mix stepped Prime Minister Harper this week when he traveled to New York to bask in the post Obama visit to Ottawa. While there I think he grew a bit delusional when commenting on our Canadian economy to an assortment of American media interests. The following is a sample of his comments taken from a piece written by Bruce Campion-Smith of the Toronto Star.
“And one of the reasons I decided to travel here today was to follow up on that rare attention we actually got in the U.S. media last week,” he said.
“We’re helped by the fact we have six major banks, three major insurance companies so it’s easier for the government to exercise moral suasion on the sector,” Harper said.
He said that Canada, while hit by the economic downturn, hasn’t suffered a meltdown of the financial sector or the mortgage foreclosures that have hit the U.S. economy so hard.
“We haven’t had to bail out any of our financial institutions,” Harper said. “There will be no government bailout of mortgages in Canada.”
Harper said he remains “hugely worried” about the financial system in the United States as well as several other unnamed countries.
“Until that problem gets fixed, it’s hard for me to see how we’re going to turn the corner on this recession that we’re in now,” he said.
Now, excuse me, isn’t this the same guy who said during the election campaign the financial meltdown might represent a “buying opportunity” for Canadians? I think so. I’m willing to forgive him for that one, because he should of known better but everybody was wrong about it last fall. However, with several months of economic hemorrhaging in spite of huge government stimulus, not getting us to the promised land, I wouldn’t be standing in New York expounding the virtues of how great Canada’s financial system is. Simply put, we’re a bit more fortunate than our American friends, but we’re by no means out of the woods. Our foibles might be just around the corner.
That may come directly out of Afghanistan, who knows. Clearly though with stock prices still dropping, the jobless rate rising and wealth disappearing, the months ahead don’t bode well. If somebody knows how to reboot, let me know. It’s time. However, keep in mind somebody once said, “This too shall pass.” This time around, something tells me its no reboot. It’s all about patience and time.