"The most rampant example of Liberal state corporatism lies in industrial policy. Despite the federal government's notional commitment to continental markets and the globalization of industry, much of Canada's industrial policy is aimed at the maintenance of traditional, nationally based industries. In broad areas such as communications, transportation, banking and agriculture, federal policy is designed to enhance the position of monopolistic or oligopolistic enterprises. Such an approach deprives Canadian consumers of the central benefit of a market economy -- consumer choice through vigorous competition. In fact, consumers actually prop up some of our biggest corporations, providing hundreds of millions of dollars annually in subsidies, grants, guarantees and non-repayable loans. These policies generally manifest themselves under the guise of "industrial policy" -- loans to Bombardier, de facto protection of Air Canada's quasi-monopoly of our air industry and the failure to adapt bank regulation to the needs and challenges of a financial sector that is less and less national, and more and more global." (Stephen Harper Op-Ed, National Post, Feb 8 2002)That latter part on the more global nature of the banking industry was an argument used by those supporting mergers, that bigger would be better to thrive globally.
Ladies and gentlemen, when the greatest economic test of our times challenged the world’s banks, when banks and financial institutions were collapsing all around us, Canada’s banks rode high in the water.Not fooling anybody:
“They maintained healthy leverage ratios. They avoided exposure to toxic assets. No major Canadian financial institution failed. And none needed a government bailout. This strength has been noted by the IMF, Moody’s, the World Economic Forum, among others. In fact, the World Economic Forum has said we have the strongest banking sector in the world.
“The key for our banks, apart, of course, from their own strong management decisions has been strong, active supervision with a regulatory framework designed to avoid reckless risk and ensure transparency. That, and to properly link risk, performance and reward. These are the mechanisms that Canada will encourage when the G-20 leaders discuss the financial sector. Because they work.
Much of the country’s resilience stems from policies—such as bank regulation and sound public finances—which predate Mr Harper.Update (4:35 p.m.): With respect to this post, I guess sometimes I really should draw these things out a little more. My point, Harper gets the big calls wrong. Wrong, wrong, wrong. He has in the past (banks, Iraq), he continues to do so in the present (GST cuts, successive prorogations, for e.g.). Past is prologue sometimes and the Harper judgment continues to demonstrate that. As he heads into the G8/G20 coat tailing on Canada's past bank regulation choices, none of which were his doing, it's worth pointing out that his own economic credibility is not exactly stellar. No one around here is against being forward looking or policy developing. I see lots of that but there's no reason not to call out flaming hypocrisy when you see it.
Update (7:00 p.m.): Should have looked at that post a little more carefully, Steve posted on the Harper bank regulation thing before I did. Interesting that we had totally different resulting posts on the issue. The update above I'll just leave as is, providing context to why I posted it, but with this addendum. All is well in the Liberal blogosphere:)