Continued confusion

Even though the Canadian economy seems to have stabilized for the time being, there is something deeply unsettling about the twists and turns of our government leaders. They are trying to cope with the aftermath of the Great Recession and the need to restore forward momentum. Members of the Stephen Harper administration and the politicians in Washington  grapple with the sluggish (at best) economy and uncertainty as to what to do next.

Most of us want to believe that our institutions are run by rational people who are experts in their professional roles, that they have a grip on reality and understand how things work. Therefore, we assume, incorrectly, that they are able to take care of severe problems as they arise. The increasing likelihood that they are at a loss as to how to protect us in the present economic turmoil is terrifying.

Now as we note the silence in Ottawa with parliament dismissed for three months, and the contradictory babble from the Prime Minister and his colleagues, we rightly feel unbounded concern.

In Washington, there have been many meetings with top bankers and leading Wall Street officials to determine the causes of the present business contraction. That has left us more perplexed than ever; we, therefore, appear to be spinning around, sometimes veering from one tactic to another.  Should there be another stimulus package for example, or should we cut back on all new spending? This lack of clarity feeds a deep fear for the future.

Too many very bright trained "experts" use mathematics to solve problems originally utilized in physics, but they fail to see the obstacles to economic improvement.

North American governments are not only trying to prevent problems, but also they are working to anticipate what lies ahead – to give themselves "radar. That is extremely difficult in today’s short-term political environment. Yet that is important, given the pace of change and the tremendous pressure on politicians to assure a strong economy.

Apparently, all but forgotten by whiz kids is that investment is essential for economic progress. The most important ingredient for a business cycle revival is new investment opportunities. Long ago that took place in the railroad industry, and in the 1920s, the automobile sector took centre stage. Nowadays, amidst the confusion about what to do next, it should be to stimulate investment, particularly for manufacturers.

In order for that to take place, the first step, one that will be the determinant this time, is to ensure that widespread corruption in the investment business ends. The shenanigans there verge on being criminal.

The securities commissions operating in the provinces are failures, notably the Ontario Securities Commission, which almost never stops any transgressions. Once that industry is cleaned up, investment funds will flow at a more rapid rate, and that will dispel some confusion and get our economy moving ahead.


Bruce Whitestone