Saturday, March 14, 2009

Stephen Harper on Who To Blame For the Recession

Here's what he said.

"We are in a global recession principally-and we have to face this-because a lot of people on Wall Street, because of a lot of people in the private sector more generally-homeowners or consumers-pushed or bought into a very unconservative idea:that they could live beyond their means.
Regulators may have failed to prevent it, but in the end, it was a failure of the private sector to live according to the values we conservatives know to be true."

He goes on to say that Canadians showed more restraint-although I've been watching Property Virgins and The Property Shop and Buy Me for the last year or so and I see nothing but a real estate bubble in Toronto and Montreal that has not yet burst and one that did blow up with the decline in housing prices in Alberta-that damned petrodollar, y'know-but nevermind.

The human drive to live without working for it is alive worldwide, and perhaps the inherently risk-averse nature of Canadian lending practices served as a useful check on the excesses that people would have otherwise indulged in. It's no sign of moral superiority, however, that people restrain you from your natural tendency toward wretched excess.

And be it remembered, part of the reason Canada did so well and now is suffering such high unemployment is that there was a knock-on effect as the Europeans say, the money tide washed north along with the flood of bootleg handguns, and now that tide is receding.

We're joined at the hip like tenants in the same apartment building and that's unlikely to change anytime soon.

The point is well taken about living beyond your means though, and there is much wailing, piteous yowyowing and various and sundry other kvetching noises here. The gnashing of teeth is becoming tiresome background noise in these parts.

Having said all that, it occurred to me that perhaps the problem lies, not in the fundamental belief that one could prosper without working for it-as speculators do-but in the belief that what was good for Wall Street and Citigroup was good for Joe and Jane Doaks-every man a speculator-and the money vault being unaccountably unlocked and unguarded.

That, I think, should be the fundamental inquiry: not whether average folk had more temptation placed within easy reach than a person could ordinarily resist, or that they had the understandable urge to live as large as they could grab, or that they saw housing prices escalating 20 per cent every year and thought the party could last forever-but why and how that notion was allowed to exist.

The breakdown of lending standards was a necessary precondition to the orgy that followed, methinks.

Ultimately, value has to come from somewhere, and it is only grown through productivity. The rest of us are merely moving stones around the board of the greatest game of Go ever invented.

It's no mystery that Yahweh says to Adam 'In the sweat of thy face shalt thou eat bread, till thou return unto the ground; for out of it wast thou taken: for dust thou art, and unto dust shalt thou return."

There's much sage thought on the human condition in that Book.

Photo courtesy of the Department of Culture-bes' li'l ole political advocacy group in the North, because they've got soul power, doncha see?


At 6:25 PM, Anonymous Anonymous said...

I agree 100% that real wealth comes from productivity. Inflated asset values are a bubble that invariably break, and only give the appearance of wealth for a limited time.

The housing bubble was bad for the economy, but you couldn't find any politicians, homeowners, realtors, or anyone connected with housing who would admit it back then. Even now, none of these people are willing to admit it. They want to reignite the boom, but all they are doing is creating a huge public debt and reinforcing the entitlement mentality for homeowners. They are moving towards socialism, and away from productivity.


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