Liberals and NDP fanning the flames

[kengs333]

With Jack Layton wanting to tax the crap out of big businesses and withdraw from NAFTA, what reason would anyone have for voting NDP on the economy?

The reason our economy is going to suffer is because of NAFTA. The whole point of NAFTA is to make trade easier with the US, and so now over 75% our exports go to that country. When the American economy implodes like it is, we're in deep doo-doo. People saw this as a possibility, and now it will be a reality. Mulroney, and everyone else responsible for NAFTA, is responsible for this. We can only be thankful that our economy is not more intehrated with that of the US as some would have liked.

[M.Dancer]

The reason our economy is going to suffer is because of NAFTA. The whole point of NAFTA is to make trade easier with the US, and so now over 75% our exports go to that country. When the American economy implodes like it is, we're in deep doo-doo. People saw this as a possibility, and now it will be a reality. Mulroney, and everyone else responsible for NAFTA, is responsible for this. We can only be thankful that our economy is not more intehrated with that of the US as some would have liked.

Thankfully 75% of our trade isn't with Europe. It's going to be far worse there.

Oh....and Nafta has nothing to do with the sub prime fiasco which lead to the credit crunch which in turn has fueled the sell off.

[kengs333]

I would rather have a leader who keeps his cool during a time like this.. Running and pulling your hair out is a job for the average citizen. The leader should be able to rise above the mess and take care of things. I don't believe that Layton or Dion is not capable of this, however, using this fear as a campaign method is quite dishonest..

I don't think that anyone is running around "pulling [their] hair out"--they're just being more honest and realistic. The word "depression" is now starting to enter the vocabulary of market analysist when taking about this "historic" situation. The economy is set to slow down considerably over the next couple of years, and if you know anything about the Great Depression you'll know that the economy hits rock bottom about four years after a crash in the market like the one that we're experiencing now. Nobody buys it when Harper sits there and dispationately claims that there's no reason to worry, that Canada has to stay the course. A lot of people are losing a lot of money, and Harper's attitude just won't sit well with them... I wouldn't be surprised if the Cons actually end up losing this election.

[kengs333]

Thankfully 75% of our trade isn't with Europe. It's going to be far worse there.

Oh....and Nafta has nothing to do with the sub prime fiasco which lead to the credit crunch which in turn has fueled the sell off.

LOL

NAFTA has everything to do with the US having a functioning economy so that we can sell things to them. If Americans don't have money or the desire to spend, then we suffer. And that's what this is all boiling down to.

[White Doors]

LOL

NAFTA has everything to do with the US having a functioning economy so that we can sell things to them. If Americans don't have money or the desire to spend, then we suffer. And that's what this is all boiling down to.

Cool! Macro-economics is so EASY!

[cybercoma]

LOL

NAFTA has everything to do with the US having a functioning economy so that we can sell things to them. If Americans don't have money or the desire to spend, then we suffer. And that's what this is all boiling down to.

And how would limiting our ability to sell to the United States from day one have helped this situation?

[M.Dancer]

And how would limiting our ability to sell to the United States from day one have helped this situation?

More people unemployed would have less to lose?

[M.Dancer]

LOL

NAFTA has everything to do with the US having a functioning economy so that we can sell things to them. If Americans don't have money or the desire to spend, then we suffer. And that's what this is all boiling down to.

This confuses you doesn't it?

[cybercoma]

More people unemployed would have less to lose?

Shhhh. Let him/her answer.

[kengs333]

This confuses you doesn't it?

Your vague, nonsensical one-liners?

[Jobu]

An insightful commentary by Andre Coyne:

~~~~~~~~~~~~

I didn’t care much for Stephen Harper’s accusation, earlier in the campaign, that the opposition were cheering for a recession. But the longer this goes on, the more I’m starting to think there’s something in it. The Liberals are now trying to make a “gaffe” of Harper’s perfectly sensible observation that the present panic on the stock markets presents a remarkable buying opportunity, for those with cooler heads. Stephane Dion, in particular, was quick to denounce the advice as “so insensitive.”

I’m sorry? How? What would they have him say? Sell? Take your lumps? Do nothing? You can only call it “insensitive” if you are bound and determined that nothing should break the spell of panic that now grips the country — that no possibility of an upside should be allowed to intrude. Just so long as cooler heads do not prevail.

This is demagoguery of the worst sort. And I don’t just mean that nothing about the present state of the Canadian economy justifies lumping it in with the United States or Europe, still less invoking the ghost of R. B. Bennett. We have not suffered a real estate crash, nor are we likely to; we have not seen a single financial institution go under, nor is any likely to; we did not have anything like the sub-prime mortgage mess; nor do we have the institutional equivalents of Lehman Brothers or Bear Stearns — large, highly-leveraged, stand-alone investment banks without the backing of a chartered bank.

But that’s not what distinguishes the opposition demagoguery in this case. It isn’t that they’re fear-mongers: it’s that, having mongered such fears, they do not propose to do anything about them. Sensibly enough — the problems of the Canadian economy, such as they are, find their origins outside our borders, and will find their solutions there. But it’s the height of hypocrisy, whaling away at the government for doing nothing while offering precisely the same themselves. The 85 lefty economists who signed that letter demanding the government go into deficit and otherwise “stimulate” the economy might have been out to lunch, but they were at least putting their names on the line, and exposing their proposals to public criticism. The opposition are taking no such risk, or responsibility.

So. We are not in a depression. We are not even, so far as anyone knows, in a recession. And while the rest of the world’s financial system dissolves in panic, Canada remains a notable island of stability. We do not have an emergency on our hands. What we have is a nasty downdraft in the stock market — one that is reflective of a deeper crisis, to be sure, but a crisis not of our making.

Is a 35% drop in the stock market (from its June peak) a crisis in itself? No it is not. The stock market does not owe you a living. It’s down 35% from four months ago, but it was up 50% in the three years before that (see chart). The present “crisis” has taken prices on the TSE all the way back to where they were in the dark days of 2005 — when they had just finished climbing 50% in two years. Think back to that time. You were rich! You were happy! You were counting your money!

Maybe you should have sold then. But you didn’t, because you wanted more. Now you’re paying the price. You’ve given up three years of gains. But you’re still up 50% from where you were five years ago. And, if you’re sensible, you’ll make up for not selling then by buying now. Those who were on the buy side on October 19, 1987 made a killing in the months that followed.

Not willing to risk it? Fine. Just sit tight. Worried about your retirement? If you’re anywhere under 55, you’ll be fine. You don’t need the money for 10 or 15 years. They’ll have more than recovered by then. If you’re over 55 — what are you doing in the stock market?

This bears emphasis: If you’re old enough to be worried about your stocks, you’re too old to own them. Stocks earn more in the long-term, because they’re riskier in the short term. You should be heavily in stocks when you’re young, because you’re not going to need the money any time soon. But you should be gradually shifting into safer investments — bonds, T-bills — as you get older. By the time you’re of retirement age, they should be only a small part of your portfolio. That’s not complicated. It doesn’t take a PhD or a high-powered investment adviser. It’s just common sense.

So when the Liberals invoke the pensioner who’s lost half of his savings in the stock market plunge, you have to ask: what was he thinking? To be sure, on this one point the Grits have actually proposed something creative — allowing pensioners to keep their investments in their RRSPs a while longer, rather than being forced to sell at these prices in order to make the required transfers into their RIFs on the usual schedule.

But at some point, people have to take a little responsibility for their actions. Otherwise, we have the individual version of moral hazard: everyone has a great ride on the stock market on the way up, but comes crying to government to bail them out when things turn south.

[Topaz]

I heard someone on US TV call this mess "economic terrorism" so the Congress would pass all the things need for the bailout! What better way to control the world then by country's economies. The next bailout or problem will be with the good old credit card crunch. More people have credit cards than mortgages! Alot of US citizens have been using them as a second or third income and to pay for medical expenses. Dion was right when he said there is a concern and Harper yesterday saying his mother was worried about her retirement fund. well I can understand that but how many seniors can get support from their kids if needed? I think Mrs Harper will be taken care of by her kids, who are in the oil business and one being the PM.

[M.Dancer]

Your vague, nonsensical one-liners?

Well, when your wit is thicker than peanut butter, those too....

[M.Dancer]

My retirement fund.....A while back a friend who (usually) knows said I should be less risk aversive...I should go into mutual funds and such. I agreed and promptly did nothing.

So today I earn between 4.75% and 4% and my savings are backed and Guaranteed by the CDIC. Since I have no loans and a credit card with a zero balance, hoping interest rates go way up as my older RRSPs are starting to mature....I could go for a nice 9% return just like back in the mid 1980s..

[capricorn]

The economy is set to slow down considerably over the next couple of years, and if you know anything about the Great Depression you'll know that the economy hits rock bottom about four years after a crash in the market like the one that we're experiencing now.

This is nothing like the 30s depression.

Carlos Leitao, chief economist at the Laurentian Bank, said a fixation on the Great Depression indicates " we've lost a little bit of perspective."

He noted the economy shrank by 30 per cent during the Depression.

"What happened in those years was really a huge shock to the economy at the time and has absolutely no relationship to what's going on today."

The Depression talk "perhaps has to do with this desire to have instant gratification," he said. "We want things to be solved right away. The famous U.S. bailout package was approved by Congress on Friday and I guess by Monday morning everyone expects things to be back to normal. The real world doesn't function like that."

"People are scared, so they say: a great point of reference is the Great Depression," said Morris Altman, head of the economics department at the University of Saskatchewan and an expert on behavioural economics.

"But a lot of people aren't aware of how dramatically different our economies are now, compared to what they were back then."

He noted, for example, there was no central bank in Canada during the Depression and there was little in the way of a social safety net.

But Leitao added what's happening may not be a Depression-style catastrophe, but it's still serious.

http://www.canada.com/vancouversun/news/bu...ef-55f406bb7cb9

More fear mongering from the left.

[kengs333]

He noted, for example, there was no central bank in Canada during the Depression and there was little in the way of a social safety net.

You mean, the kind of social safety net that neocons despise and would gladly get rid of given the chance? Go figure.

[kengs333]

Well, when your wit is thicker than peanut butter, those too....

Yeah, I guess humour isn't in my blood...

[kengs333]

More people unemployed would have less to lose?

Like those 500 from Volvo, or 800 from John Deere?

[cybercoma]

kengs, you implied we should have never gotten into NAFTA because the American economy is collapsing now and it is hurting us.

I asked you a question earlier and I'm wondering what your answer is:

"How would limiting our ability to sell to the United States from day one have helped this situation?"

[kengs333]

kengs, you implied we should have never gotten into NAFTA because the American economy is collapsing now and it is hurting us.

I asked you a question earlier and I'm wondering what your answer is:

"How would limiting our ability to sell to the United States from day one have helped this situation?"

Do you think it's prudent to tie our economy to one country?

[cybercoma]

Do you think it's prudent to tie our economy to one country?

If you have a point to make, please make it.

As far as your question, our government doesn't tie our economy to anything. They just facilitate trade through trade agreements or put up barriers in the form of tariffs. The United States is not the only country with whom we have trade agreements.

[M.Dancer]

Regarding Layton's economic plan to get us through....

When Mr. Layton uses "corporate," he's usually thinking of the NDP devils: banks, insurance companies, energy producers. But there are a whole whack of middle-sized companies, startups, manufacturing companies (these are deemed "good" companies by the NDP because they are unionized) that would be adversely affected by this NDP policy.

Mr. Layton proposes to "create" 40,000 new jobs in green businesses. This, too, is a flight from reality. (Why do all politicians, not just Mr. Layton, pick these sort of round numbers such as 40,000 out of thin air, when they have no idea how the future will unfold?) The government does not "create" jobs, unless it wants to put people on the payroll. It "creates" the conditions for others, namely the private sector, to add employees or start companies.

Just about the worst combination for achieving this objective would be a series of direct subsidy programs combined with higher business tax rates, as the NDP proposes. If a government wants to encourage these kinds of jobs, then it would price (tax) carbon to make it more expensive, create "flow-through" (and therefore higher) prices for renewable energies into the electrical grid, and let the new market with different price signals do the work.

http://www.theglobeandmail.com/servlet/sto...olitics/?query=

Quite frankly only Harper seems to understand what is needed here. Calm.

[cybercoma]

Was that Jeffrey Simpson's article? It looks familiar.

[M.Dancer]

Like those 500 from Volvo, or 800 from John Deere?

not having Nafta would have no effect on Volvo, a swedish manufacturer....

Perhaps you would blame Nafta for the cutting of 1500 jobs in Europe at the same time?

[M.Dancer]

Was that Jeffrey Simpson's article? It looks familiar.

Arr.