Tuesday, June 22, 2010

Bailouts, Sellouts and the 2010 Comedy Tour

With the Reformers touting their handling of the economy, another columnist has weighed in on keeping Canada informed.

Forbes magazine have already exposed Flaherty's buying up of 125 billion in sub-prime mortgages on behalf of Canadian taxpayers, Murray Dobbin has sounded the alarm on this for a very long time and now Ralph Surettes has his say.

You know how wonderful Canadian banks are. They didn’t fail when others did, and didn’t need to be bailed out. We are standing tall among nations in that regard, and the Harper government can stick out its chest and preach the Canadian model of prudence and caution to a profligate world. Even the Americans are agog at our fiscal virtue.
Plus, our economy has been recovering from
recession faster than others just in time for the G20 meeting in Toronto. It’s wonderful, fake lake and all.

Does this sound too cute? Here’s the inevitable other side of the story. The banks were actually "bailed out" to the tune of $125 billion just before and after the 2008 election — in the form of a massive purchase of questionable mortgages and other "rotten paper," in the words of one economist, held by them. This was done through the Canada Mortgage and Housing Corporation, a federal agency. The taxpayer is now on the hook for these mortgages, 40 per cent of which are considered at risk, with more to come if interest rates rise and the economy dips again.

But the kicker is this: Hardly anybody noticed.

It wasn’t an issue in the election, and the financial press said nothing. A few tried, and are still trying, to raise the alarm. Michel Chossudovsky, a retired University of Ottawa economist and head of the Montreal-based Centre for Research on Globalization, pointed out that Finance Minister Jim Flaherty had announced a $2.3-billion surplus in the offing before the election, then quickly changed it to a $64-billion deficit. He argues that the entire deficit was for the first installments of the bailout, which the prime minister described as "not a bailout" but a "market transaction."

Even Chantel Hebert who is considered to be the left's only voice on television news has claimed that Flaherty has not been given enough credit for his handling of the economic crisis. I'll hold the applause Chantel.

But Hebert should be thrilled though because cabinet ministers have taken the "Why we love Jim Flaherty" comedy tour on the road, paid for by us, of course.

I wonder if they'll mention the 125 billion dollar worthless paper buyout. Not likely. I did say this was a comedy tour.

The government plans to highlight once again the benefits of Canada’s financial system, and how the prudence displayed by lenders and the vigour demonstrated by Canada’s banking regulator have served this country well. In the lead-up to the G20, Canada has pushed not only the need for an overhaul of banking regulations — that will require banks to hold more capital on their balance sheets and limit risky lending — but also better supervision of lending practices. Flaherty is set to address a blue-chip crowd in Manhattan Monday morning, while Natural Resources Minister Christian Paradis is in Beijing and Immigration Minister Jason Kenney is scheduled to be in London.
Not to worry though folks, Jimmy boy has a plan. Harper traded all of Canada's rights away during his two and a half month prorogue vacation, and now Flaherty is selling us off. Yep. He told those New York boys that Canada is now officially for sale. His plan all along.
Canadian Finance Minister Jim Flaherty announced on Monday a pending sale of selected federal assets, saying in New York there were some "entities" the government shouldn't be running. "We are doing strategic reviews; we have a list of government entities that we think need to be looked at closely about divestiture, so you can expect more news from the federal government about opportunities," Flaherty told a business-oriented audience at the Canadian consulate in New York.
About opportunities. And what are our "opportunities" Jimmy? When we finally get you guys out of office, will there be any?

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