Saturday, April 4, 2009

It is patently FALSE for Harper to argue that we have not bailed out our banks

Harper seems to be getting a lot of mileage over his notion that Canada has not bailed out our banks.

It’s a really good argument......if only it were true.

When is a bailout not a bailout? I guess not bailing out the banks would occur under the observable circumstances where the banks are conducting business as usual?

When is ever considered “business as usual” for the federal government to be swapping cold hard taxpayer cash in exchange for CMHC mortgages that the banks want off their books, ASAP?

The first tranche of that “bad bank asset” for “good taxpayer asset” swap (bailout?) was in the amount of a mere $75 billion, during the middle of the 2008 election. Was anyone paying attention?

When that bailout proved inadequate, it was followed up by another “bad bank asset” for “good taxpayer asset” swap (bailout?) in the amount another mere $50 billion, for a total of $125 billion of non-bailout bailouts.

Move along folks, there’s nothing here to see.

The other bailout of Canadian banks that Stephen Harper is in total denial of, even before the ink has dried on the bailout cheque that is being drawn against the account of Canadian taxpayers is that absurd bailout of Asset Backed Commercial Paper. (ABCP).

ABCP was an elaborate scheme, mimicked by the Canadian banks from Wall Street, that is best described as a cross between financial alchemy, except instead of turning lead into gold, thought it could turn fixed (interest) into floating (interest), with an elaborate cheque kiting scheme, in which tomorrow’s investors will take out today’s exiting investors.....provided we can keep all these balls in the air for another 30 days at a time?

Does that financial disaster in the making, sound like the kind of thing deserving of a bailout? A taxpayer bailout? Are we in the business of immunizing people from their own mistakes? Especially mistakes that had the whiff of inevitability to them, from the very outset? Of course not. Doing so has an enormous cost associated with it, both monetarily and endemically. Or as English liberal political theorist Herbert Spencer warned: “The ultimate result of shielding man from the effects of folly is to people the world with fools”.

Speaking of a world peopled by fools, Canadians are complete fools to think that we have not bailed out our banks, at least those that subscribe to such a fasle notion.

The bailout of ABCP with billions of taxpayer dollars is, make no mistake about it, a bailout of our banks. Hidden beneath the thin veneer of concern about the minute fraction of individuals who owned ABCP , all of whom would have been required to sign declarations that they had sufficient assets and expertise to qualify themselves as “accredited investors” before they would have been allowed by securities legislation to buy this garbage, lies the real reason taxpayer money has been thrown at this scam. It’s because the banks were the ones who constructed this house of cards in the first place and were faced with a large open ended legal liability for their negligent actions. The so called Pan Canadian solution involves vacating these banks from their liability. Poof it’s gone type of vacating. Tax payer money is being used to white wash the misdeeds of the banks and absolve them of their liabilty. The numbers involved are huge in terms of the benefit that has been conveyed to the banks at taxpayer expense. It is impossible to put a number on the open ended liability that has been spared the banks....with the billion dollar band-aid being provided by taxpayers.

It is completely intellectually deceitful for anyone to say that these activities of the last three months do not constitute a a bailout of our banks, which probably explains why Stephen Harper is the one at the front of that parade, and all the media are in the procession line with drums and bugles blazing. Is it not, at least the role of the Official Opposition to call out Harper on this gross deceit and purposeful misperception of Canadians, since Harper is making this claim all over the world and with great political effect? It may have become normal practice for Canadians politicians to constantly lie to Canadians, but please don’t embarrass us on the world stage. We have our reputation to uphold, although I am losing track of what it is? Oh yeah, we have not had to resort to bailing out our banks......with the exception of the repeated occurrences in which we have indeed bailed out our banks.

Why am I reminded of Harper's patently false claims that income trusts cause tax leakage, or that his attempted bribe of Chuck Cadman did not constitute a criminal bribe or that he did not have sex with that woman, Monica Lewinsky. Sorry that was Bill Clinton and the US, where they actually call their politicians out on their demonstrable lies and the opposition party goes for the jugular instead of the inane and innocuous.


Kephalos said...

This post makes me doubly depressed. Canadian democracy has been deeply stained with half-truths, deceptions, manipulations, outright lies, blah, blah, blah. Each way we turn there's more and more of the same: making it up as they go on Ronald Smith policy and blacked-out 18-pages on income trusts, deceptions on BCE and food inspection, personal harm and loss to individual Canadians, manipulating independent bodies (AENR and Gainey report), on and on it goes.

Harper and his government do these things because they can get away with these things. The Canadian press seems to me to be brutally dishonest or lazy.

Dr Mike said...

Flaherty argues that obtaining the bank mortgages was good for Canadians & that we will make a killing on these assets.

Um ... errr --am I dense here or what.

Banks do not give anything away that would make them money--bottom line--end of the road--no two ways about it.

The clowns running the asylum in Ottawa must think we are thicker than a Douglas Fir on this one.

Hell , maybe we are as I have heard minimal squeaking from the opposition or the press or for that matter from Joe & Jane citizen.

When will Canadians get off their butts & take a freaking look at what is happening to our country--the people in Ottawa lie to us on a regular basis & they just don`t give a damn.

They know that we will just take it & maybe punish them by voting them out of office someday.

Unfortunately by then the damage is done , they have feathered their future nests & we are up the creek without a paddle--screwed again.

Problem is money & power talk & we just don`t have enough of either.

Dr Mike Popovich

Anonymous said...

Send a letter to FOX. I am sure they won't like finding out they were a) lied to b) used


Anonymous said...

ea, watching Pudge and Bernie Flaherty the last few days I had to ask these guys EVER tell the truth?

LIE, CONCEAL, FABRICATE...perfect selection of words to describe the whole of the Conservative party and their supporters.