Entries from September 2008 ↓

Not about nothing

Who’s watching? This picture of me helping a volunteer put up a roadside sign appeared on the Conservative web site on Halton. These days, nothing is private.

Day Twenty-four
Today I knocked on doors for six hours and covered a few hundred houses. I showed up on doorsteps less than a day after the stock market had committed suicide. In fact, on lots of stoops the daily newspapers were still splayed out, their front pages coated with words about financial Armageddon.

The area I knocked was solidly middle-class – a mix of row townhouses and single family homes I’d say were in the $250,000 to $400,000 range. For Halton, that’s very middle-of-the-road. In the driveways, almost all vehicles were less than two years old, and most houses had more than one. And a dog. And two kids. In this poll, there were not many election lawn signs – maybe three for the Conservative candidate, one Green and four for me. I was the only candidate so far who had visited these streets.

So, what happened?

Well, lots. A long discussion about the environment with a woman who refused my brochure on ecological grounds. An invitation to come in, have a drink and meet a one-day-old baby cradled in his young mother’s arms and surrounded by at least twenty admiring people. My first encounter with a Shipoo (poddle crossed with a shitsu). A guy who reads this blog everyday, and his smiling wife and child. A lovely elderly woman taking delivery of bushels of potatoes who spoke Polish to my wife. A man who asked me to put two lawn signs on his tiny patch of grass, “just to piss off that guy” (he pointed to a Conservative sign across the street). An unemployed factory worker in his fifties desperately unhappy to be at home. A woman with dreadlocks who smiled broadly as the door opened at 6 pm, and said, “I honked at you when you were on the roadside this morning at seven.” A conflicted voter who likes Harper for paying down $40 billion in debt but thinks he was a fool for 40-year mortgages. A couple who insisted on trotting out their two confused grade school kids to meet an MP. Scores of people who recognized me, took my literature and wished me luck (politely, or sincerely, I did not know). And one man, only one, who wanted to talk about the markets.

And herein, of course, is the dilemma for politicians. These folks are busy living their lives, while we live politics. They are more concerned – and rightly so – with their families, their pets and their gardens than they are with the federal budget, climate change policy or tax reform. Gas prices register as an immediate issue, and certainly financial security is always top of mind. But in a complex world with so many daily obligations, who’s got time to parse the stuff on Newsworld, CNN or CPAC?

In this environment, I find one message does resonate with my constituents. Simply, that I work for them. Not a party. Not a leader. Them.

Most seem to know my story, and why my signs are red in this election. Some hate it, the majority do not. Some think I am a hero for standing up to Stephen Harper and being independent-minded. Others believe it was the height of petulance. Meanwhile, a lot of Conservatives in Halton are torn between loyalty to their brand, and yet disgust at the way Stephen Harper forced a party-approved candidate on them.

Having said that, internal political strife or even the fascinating journey of a maverick MP will not determine the election outcome in Halton. I fully understand that. They will not vote for me or against me because of the Green Shift. They will not vote for or against the Conservative candidate because she’s lied about threats to their monthly child payments. They won’t vote for the Green contender because they choose a higher GST and 12 more cents on a litre of gas.

In the end, they’ll vote based on the perception of who will best protect what they’ve got.

And why shouldn’t they? It’s their country, not ours.

Stephen Harper would like this election to just pass. As Ken Dryden said in a speech, Harper wants a Seinfeld vote. An election about nothng. That’s why the Conservatives have issued no plan, made no substantive promises and worked feverishly to downplay worries about where the economy’s headed. We’ll know in two weeks if the strategy works. Let’s pray it does not.

I intersected with a lot of lives today. With each one I became more sure of my cause. A political brand won’t fight for these people. A guy in worn cowboy boots will.

* * *

Vote pick of the Day
This was a tight Liberal/Conservative race in 2006. The incumbent, former Conservative Garth Turner won by less than 2,000 votes. He was kicked out of Harper’s caucus and he is running for the Liberals in this election. He has been supportive of environmental initiatives. He has the best chance of defeating the Conservative. We recommend Garth Turner.“Vote for Environment”

He knew

In the News:
Markets surge back by 4%
US recession will hurt our housing market: economist

Day Twenty-three
So, where from here?

This much, we know. The US economy is in recession and the times will get worse for months and months to come. The mess, as feared, has slopped over onto everyone. Canada, Europe, China – all will be impacted. Commodity prices will keep going down for a while, along with real estate. Billions more will be lost. This is the start, not the end.

Banks will fail, but not here. Ours will just stop lending money to lots of people and businesses. Condo developments will go bust. Marginal companies won’t make it. Car sales will fade with car loans. Inflation will become deflation. And you can stop worrying about high gas prices.

Debts will become unrepayable for many people, so I hope you have few. Interest rates will be going down as central bankers try everything to stop bad from becoming worse. Albertans, and the oil sands, will not be so envied soon. Prices for just about everything will fall, as will the value of your home.

Regardless of whether or not the $700 billion financial bailout passes Congress on Thursday, global confidence has been dealt a major blow. With less confidence, there is less credit. And without free flowing credit, economic expansion stalls. This is what terrorized stock markets on Monday, and will continue to do so.

I suppose it is possible the United States could slump into a quasi-depression, taking us with it. But that’s unlikely. A protracted recession – a year or two of negative growth – is quite possible. Investment portfolios could lose a third to a half of their value. Home equity will fade by, perhaps by as much in certain markets. The value of your mortgage will not fall, even though your wages might. This is deflation – when cash grows in value because every other asset is declining.

Although Stephen Harper did not know the events of today would take place, he knew the danger of imminent financial chaos. So did I. And if you’ve read this blog for the past year, so did you. I have spelled out the reasons for real estate deflation, falling family net worth, a protracted US downturn and the considerable impacts on Canada. I told you how the Harper government policies of 0/40 mortgages and of cutting the GST instead of income taxes would make us more vulnerable. And I have detailed why massive higher government spending and a blowing of our surplus would make such a time as this more difficult.

Harper knew the danger, as did the finance department, the head of the Bank of Canada, the PMO strategists, and you and I. That’s why he alone triggered the election, not chancing to wait for Parliament during the very dangerous month of September, when he’d have to answer to the people daily.

So, where from here?

Well, if you keep Stephen Harper as prime minister, you should know. We go right down that road to a deflationary, job-killing, real estate-munching mess. By this time next year Canada will likely be running a growing budget deficit, taxes will be not a dime less, more people will be without work, the car business will be on its knees, young homeowners will be desperate and in debt, and the country will be poorer in all aspects.

Harper and Jim Flaherty – despite the obvious dangers and the repeated warnings here and elsewhere – will have failed us. Why should they be rewarded now with government? Why would they be worth the risk?

If there was ever a moment to stop for a few days and reflect on what a balanced, sane path forward would be, I think it’s now.

The country requires some bold and rational action. Cut income taxes to all citizens. Cut corporate and small businesses taxes to rescue jobs. Shift government revenues from families to energy consumption. Restore those income trust billions. Help create sustainable new jobs. Stem a real estate crisis with new securities and regulation.

Most of all, choose a prime minister not known for his sound bites, sweaters or reckless ambition, but for an unwavering dedication to service and honesty.

We did not ask for this election. Now that it’s here, let us not waste it.

Bailout vote a bust

The final toll:
Dow – down 777.68
TSX – down 840.93
Oil – down 10% to $98.22

Colour this the nightmare scenario for George Bush and the American political establishment. The American Congress has reached a total stalemate on the passage of the $700 billion bailout of Wall Street. At this hour, the bill has been technically defeated, a development which has caused the Dow to sag more than 500 points and the TSX to plunge over 800 points.

This comes just hours after three more banks failed – one in the US, one in Britain and another in Europe. Without the bailout, American leaders are warning of the possibility of Depression-like consequences, including the failure of dozens, perhaps more than a hundred, banks.

Congress is paralyzed at the moment, as members horsetrade in the corridors and hallways, with the White House desperate to find enough votes to get this deal done. With the US Presidential election less than 40 days away, this has the potential to be a game-changing development of historic proportions, virtually guaranteeing the defeat of Republican John McCain, and seriously hobbling the coming presidency of Barack Obama.

If Congress does not pass this bill when it comes before the legislature once again, the market drop seen thus far will pale in comparison to the consequences at the end of the day.

From the Globe and Mail, and wire services:

Mr. Bush and his economic advisers, as well as congressional leaders in both parties had argued the plan was vital to insulating ordinary Americans from the effects of Wall Street’s bad bets. The version that was up for vote Monday was the product of marathon closed-door negotiations on Capitol Hill over the weekend.

“We’re all worried about losing our jobs,” Rep. Paul Ryan, R-Wis., declared in an impassioned speech in support of the bill before the vote. “Most of us say, ‘I want this thing to pass, but I want you to vote for it — not me.’ “

With their dire warnings of impending economic doom and their sweeping request for unprecedented sums of money and authority to bail out cash-starved financial firms, Bush and his economic chiefs have focused the attention of world markets on Congress, Mr. Ryan added.

“We’re in this moment, and if we fail to do the right thing, Heaven help us,” he said.

From the Wall Street Journal:

Investor sentiment on Monday also suffered a blow from aggressive selling in European markets after four financial institutions there sought rescue plans. Three governments bailed out Fortis, the U.K. government nationalized mortgage lender Bradford & Bingley, Germany’s Hypo Real Estate Holding was rescued by a consortium, and Iceland stepped in to save a local bank. All major European indexes were down more than 4% , with financial stocks leading declines.

The troubles in Europe sent the dollar rallying against the euro and the British pound. The U.S. Dollar Index, which measures the greenback’s value against a basket of six overseas denominations, rose 0.7%.

Oil futures dropped slid almost $8, trading under $100 a barrel in New York as fears about slowing demand due to global economic weakness gripped the commodity markets. The broad Dow Jones-AIG Commodity Index slid more than 4%.

Analysts said the flurry of developments around the world is confirming fears that the global financial contagion is likely to spread further before any recovery. “There’s an increasing realization that the cleanup and the mending of all that’s gone wrong is going to take an extended period to work through, and we’re going to see an extended recovery period,” said Jamie Spiteri, senior dealer at Shaw Stockbroking in Sydney.

Well, it looks like there will be no further voting in Congress today – at least, that’s the buzz. Too dangerous. Too much risk of another failure. Stakes far too high.

The immediate consequences are unknown, but it would appear this development will accelerate the financial meltdown currently taking place. Given current events, consumers might well expect higher borrowing costs, just as homeowners face stiffer mortgage costs and new home buyers encounter a cold shoulder from bankers. In our modern world, credit is the lifeblood of commerce, and the failure of this bailout is potentially monumental.

So, are there consequences for Canada? For our election? For the government?

The coming few days will tell, of course, but the fact remains we are vulnerable. As detailed in the post below, the current administration has not taken defining steps to safeguard Canadians.

The middle class is at risk. Will it notice in time?