Dave
Posting Freak
Posts: 3281
Registered: 4-6-2003
Location: Halifax
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Mood: .......
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Newsweek...
By Fareed Zakaria
Newsweek
February 16, 2009; U.S. Edition
The legendary editor of The New Republic, Michael Kinsley, once held a
"Boring Headline Contest" and decided that the winner as "Worthwhile
Canadian Initiative." Twenty-two years later, the magazine was rescued from
its economic troubles by a Canadian media company, which
should have taught us Americans to be a bit more humble. Now there is even
more striking evidence of Canada's virtues. Guess which
country, alone in the industrialized world, has not faced a single bank
failure, calls for bailouts or government intervention in the financial or
mortgage sectors. Yup, it's Canada. In 2008, the World Economic Forum ranked
Canada's banking system the healthiest in the world. America's ranked40th,
Britain's 44th.
Canada has done more than survive this financial crisis. The country is
positively thriving in it. Canadian banks are well capitalized and poised to
take advantage of opportunities that American and European banks cannot
seize. The Toronto Dominion Bank, for example, was the 15th-largest bank in
North America one year ago. Now it is the fifth-largest. It hasn't grown in
size; the others have all shrunk.
So what accounts for the genius of the Canadians? Common sense. Over the
past 15 years, as the United States and Europe loosened regulations on their
financial industries, the Canadians refused to follow suit, seeing the old
rules as useful shock absorbers. Canadian banks are typically leveraged at
18 to 1-compared with U.S. banks at 26 to 1 and European banks at a
frightening 61 to 1. Partly this reflects
Canada's more risk-averse business culture, but it is also a product of
old-fashioned rules on banking.
Canada has also been shielded from the worst aspects of this crisis because
its housing prices have not fluctuated as wildly as those in the United
States. Home prices are down 25 percent in the United States, but only half
as much in Canada. Why? Well, the Canadian tax code does not provide the
massive incentive for over consumption that the U.S. code does: interest on
your mortgage isn't deductible up north. In addition, home loans in the
United States are "non-recourse," which basically means that if you go belly
up on a bad mortgage, it's mostly the bank's problem. In Canada, it's yours.
Ah, but you've heard American politicians wax eloquent on the need for these
expensive programs-interest deductibility alone costs the federal government
$100 billion a year-because they allow the average Joe to fulfill the
American Dream of owning a home. Sixty-eight percent of Americans own their
own homes. And the rate of Canadian homeownership? It's 68.4 percent.
Canada has been remarkably responsible over the past decade or so. It has
had 12 years of budget surpluses, and can now spend money to fuel a recovery
from a strong position. The government has restructured the national pension
system, placing it on a firm fiscal footing, unlike our own insolvent Social
Security. Its health-care system is cheaper than America's by far
(accounting for 9.7 percent of GDP, versus
15.2 percent here), and yet does better on all major indexes. Life
expectancy in Canada is 81 years, versus 78 in the United States; "healthy
life expectancy" is 72 years, versus 69.
American car companies have moved so many jobs to Canada to take advantage
of lower health-care costs that since 2004, Ontario and
not Michigan has been North America's largest car-producing region.
I could go on. The U.S. currently has a brain-dead immigration system. We
issue a small number of work visas and green cards, turning away from our
shores thousands of talented students who want to stay and work here.
Canada, by contrast, has no limit on the number of skilled
migrants who can move to the country.
They can apply on their own for a Canadian Skilled Worker Visa, which allows
them to become perfectly legal "permanent residents" in Canada-no need for a
sponsoring employer, or even a job. Visas are awarded based on education
level, work experience, age and language
abilities. If a prospective immigrant earns 67 points out of 100 total
(holding a Ph.D. is worth 25 points, for instance), he or she can become a
full-time, legal resident of Canada.
Companies are noticing. In 2007 Microsoft, frustrated by its inability to
hire foreign graduate students in the United States, decided to open a
research center in Vancouver. The company's announcement noted that it would
staff the center with "highly skilled people affected by immigration issues
in the U.S." So the brightest Chinese and Indian software engineers are
attracted to the United States, trained by American universities, then
thrown out of the country and picked up by Canada-where most of them will
work, innovate and pay taxes for the rest of their lives.
If President Obama is looking for smart government, there is much he, and
all of us, could learn from our quiet-OK, sometimes boring-neighbour to the
north. Meanwhile, in the councils of the financial world, Canada is pushing
for new rules for financial institutions that would reflect its approach.
This strikes me as, well, a worthwhile Canadian initiative.
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jonnynewbreed
Posting Freak
Posts: 1091
Registered: 4-4-2003
Location: Dartmouth, nova scotia
Member Is Offline
Mood: Quite nice actually.
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Fuck yes. I spoke with my financial adviser today (aka Dad) and I only lost a little bit of money. Enough that i'm thankful that I didn't loose more
but still annoyed that I lost any at all.
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Discipline
* DRUNKEN MONKEY *
Posts: 11900
Registered: 9-8-2004
Location: Over here
Member Is Offline
Mood: The Alley Dukes
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Canada rules.
‘Do you know what a love letter is? It’s a bullet from a fucking gun. Straight through your heart.’
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Six66Mike
Posting Freak
Posts: 3090
Registered: 11-20-2003
Location: Queensland Australia
Member Is Offline
Mood: Dead Hearts
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Hasn't Harper atleast thought about giving a few billion to GM in line with a US package since they have such a big part in Ontario?
Aussie banks are doing similarly well as Canadian banks, Commonwealth Bank bought up another bank a couple months ago. But when you make ~$20/month
per customer in fees and coming off the tails of a massive real estate boom it's no wonder.
A lot of people ask me what kind of music I like. I love "soul music". My "soul music" isn’t a style, genre or niche. It’s music that is genuine. It’s
a painful lyric, a dirty bassline, it’s a harrowing vocal, it’s feedback, it’s an anthem, it’s a love song, it’s anarchy. I’ve got my personal
favourites but in the end it doesn’t matter who or where it comes from... so long as it’s good and it's real.
- Paul Morris, music director at 97.7 HTZ-FM
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