Monday, September 29, 2008

$700B Bailout! Is It A Deal or No Deal?

The bubble has burst on the "brain trust" that was the American financial sector. This is the biggest government bailout in history. Deal or No Deal is the question and this bailout is not a slam dunk yet. Where is Howie Mandel when you need him? The package is still in some serious trouble with opposition from a significant segment of the Washington political class – House Republicans.

The very same Bush-league laissez-faire Republicans who our own Harper Conservatives see themselves as Bush-Republican clones. These guys have systematically reduce the responsible role of government to protect citizens from excess and abuses of greed and graft.

As the Congress and White House look at passing a law on how to nationalize the American financial sector they are putting the taxpayer on the hook of $700B of more borrowed money. No doubt that money will be from more borrowing that will undoubtedly come from China one again. This will serve to make the Americans even more vulnerable and subject to the whim of the Chinese.

The chance for a world-wide recession is still very real and confidence in the marketplace is going to erode significantly, including Canada. The expectations are for a steep economic decline as credit tightens up. The TSX is down over 535 points as the time of writing and crude oil is down $6 a barrel.

The Report On Business front page story today shows that Canadian CEOs are the most pessimistic they have been in years. The Harper claims that Canada is on track for a surplus this fiscal year because just one month has shown as surplus so far does not add up. Confidence has shifted under Harper’s watch. In June 2008 58% of CEOs were looking for moderate to strong growth in the Canadian economy. One quarter later, the September 2008 confidence shows 60% of CEOs now believe the economy will go into strong or moderate decline. This is more volatility that we have seen in the election polls this time around.

It is time to look seriously at Harper’s approach to crisis. Can a one-man-band who thinks he is the only smart person in any room he visits be worth the risk? The Conservative bench strength has Harper and Prentice as the talent – now that Emerson is gone. Skills and competence of the Harper cabinet drops off dramatically after those two men. There is no “I” in team and there is no Harper team either. Do we dare put our entire future into the hands of one man – namely Mr. Harper? All of us are smarter than one of us Mr. Harper.

The Liberals have lots of bench strength economically, environmentally and socially and a proven positive record in managing the economy in tough times. It is time to bring back Paul Martin, the best Finance Minister Canada has ever had. He turned a $46B Mulroney deficit into a long time string of balanced budgets, paid down debt and ended up with a $12B surplus.

Harper squandered that $12B surplus in less than 2 years. The facts show that Harper is not the fiscal managers and stewards of the taxpayer’s dollars. He misleads in this area like he does in many other policy areas. Harper is not only not worth the risk. He is the risk.

We are all going to be in this together and for a long time. We should deal with it together...not just depend on Harper as a one-man political and policy band to deliver us from this evil. Vote for a team approach and that means you need to vote Liberal on October 14th.