Posted by Steve Markowitz on September 15, 2011
Canada has publically expressed displeasure with President Obama’s proposed new stimulus (jobs) bill. As part of the $450 billion package, the White House added a “Buy American” clause. The Canadian government is demanding a meeting with White House officials to lobby for an exclusion, similar to what they were granted for Stimulus-I.
Canada’s stance against Obama’s jobs proposal demonstrates one major problem with any governmental intervention into the economy. The goventment chooses winners and losers; i.e. who gets the handouts. This is not only an inefficient method of picking proper “investments”, but also corruptive as politicians seek to reward supporters.
Stimulus-I gave us boondoggles such as the $500 million in taxpayer funds lost in the failed Solyndra venture. Expecting better results for Stimulus-II is futile.
Posted in Canada, Government Ineptness, Governmental Intervention | Tagged: Buy American, Canada, Jobs, Obama, Solyndra, Stimulus Package | Leave a Comment »
Posted by Steve Markowitz on July 17, 2011
The nationalpost.com posted an incredible story of Progressivism run amuck. Last week a Canadian court ordered Air Canada to pay $12,000 to a French-language rights crusader, Michel Thibodeau. Air Canada’s crime? During a 2009 flight, Thibodeau in French ordered a 7Up from a flight attended who didn’t speak the language and as a result he received a Sprite. How horrific!
A harebrain Canadian law called the Official Languages Act requires Air Canada and other firms to communicate and provide services in two official languages. In justifying the ridiculous legal award, Justice Marie-Josee Bedard said: “The applicants’ language rights are clearly very important to them and the violation of their rights caused them a moral prejudice, pain and suffering and loss of enjoyment of their vacation. ….. It is also my opinion that awarding damages in this case will serve the purpose of emphasizing the importance of the rights at issue and will have a deterrent effect.”
Thibodeau is a parasite who lives off of an idiotic law. This latest award is at least his third for similar “violations” of his “rights”. The result of such awards is a premium added to the cost of services as companies go to ridiculous lengths to avoid litigation. This is yet another example of Progressivism run amuck. Power must be removed from government to stop this absurd intrusion into our lives and companies.
Posted in Canada, Progressives | Tagged: Air Canada, Canada, French, Justice Marie-Josee Bedard, Language, Michel Thibodeau, Official Languages Act, Progressives | Leave a Comment »
Posted by Steve Markowitz on April 1, 2011
When governments manipulate markets with interventions, as they have done often since the mid 1990’s, economic imbalances are created that lead to consequences. Examples in the United States in the past fifteen years include the Dot.com bubble, telecom bubble, stock market bubble and the worst bubble to date, the U.S. housing bubble. With ever increasing frequency, we jump from one crisis to another as governments attempt to fix “problems” by constraining markets from reaching equilibriums.
The housing bubble was initially created by governmental intervention in markets; i.e. keeping interest rates artificially low and promoting home ownership to those that could not afford homes. Since the meltdown of this bubble that caused the worst financial crisis of modern times, governments incredibly have gone back to the same failed interventions on steroids. In an effort to forestall market corrections, governments have resorted to printing money and keeping interest rates at historically low rates. The result; more bubbles.
The signs of economic imbalances are pervasive. Bubbles exist in the currency markets with the Japanese Yen hitting historic highs even with the significant problems that country now faces. Commodity prices have significantly increased in the past year. Finally, housing prices in some countries are spiking in ways that are eerily similar to that of the U.S. housing bubble.
The Wall Street Journal reported on a potential housing bubble growing on our northern border. Canada’s hosing prices are skyrocketing:
- In the past year Canadian home prices are up nearly 9%.
- Housing prices are at 5.5 times disposable income , compared to the historical average of 3.5
- Current mortgage rates in Canada are between 2% and 4%. The Canadian Association of Accredited Mortgage Professionals estimates that well over 10% of first-time buyers who purchased homes in 2010 would be challenged paying their mortgages if rates rose to 5%, a more typical historical rate.
- Canada’s current benchmark interest rate is 1%. It doesn’t take a rocket scientist to see which way rates will be going. Yet the Bank of Montreal estimates that 18% of Canadians would have difficulties meeting their mortgage obligations if rates start going up.
Like all bubbles, Canadian housing prices will continue to rise until it stops. Then, panic will set in as over extended home owners rush to sell their houses creating the inevitable downward spiral in prices.
Easy money policies are being used by governments worldwide in an effort to avoid the required deleveraging, i.e., paying down the excessive debt. However, the U.S. dollar’s status as the reserve currency places extra responsibility for world monetary policy on the United States. America has shirked that responsibility and instead has exported inflation and bubbles worldwide. At the same time, countries like Canada could have disconnected there monetary policy from that of the United States by bringing their interest rates back to the historical norm. Instead, they will watch their own housing bubble pop and act surprised by it. So the world turns.
Posted in Bubbles, Canada, Housing Market | Tagged: Bubbles, Canada, Easy Money, Housing Bubble, Interest Rates, reserve currency, Yen | 1 Comment »