Posted by
Andy Zarowny on Saturday, July 11, 2009 10:15:49 PM
Some have wondered with all
of the economic doom and
gloom, if there are any actual
success stories. Any easy one
lies just north of the border...
Canada is weathering the
global crisis fairly well. Sure,
unemployment is rising there
as well, manufacturing and
exports are down (as we in
the U.S. buy less from our
favorite trading partner) and
the Canadian stocks have also
been hit hard. But on the plus
side, their banks were generally
in better shape at the beginning
with less leveraged in specula-
tive markets.
Another key factor is that the
Canadian government has
been practicing better fiscal
policy. Their reaction to the
financial upheaval has been
more sound as well. Taxes
have been cut! There's a
novel approach! LOL! Yes,
apparently the Canadian
government understands that
any recovery will start in the
private sector. Lower taxes
and creating incentives for
markets to invest, expand
and employ people are work-
ing! Early forecasts that
Canada's GDP would drop
about 4-5% has been revised.
A new report from the IMF
predicts Canada's GDP to
only decline 2.3% and the
INCREASE 1.6% in 2010,
nearly double previous pre-
dictions.
Another step in the right
direction are the policies
of Canada's central bank.
The Banque du Canada
is sticking to it's bible of
printing money such that
the rate of inflation stays
in the 2-3% range. The
Canadian dollar is gaining
strength against the Green-
back of the U.S., as well
as other currencies such
as the Yen.
While America is Canada's
#1 trading partner, the de-
cline in exports to the U.S.
is making the Canadians to
look elsewhere for markets.
China is the obvious place
to do business. With the
Chinese also practicing sound
Capitalistic solutions, such
as lowering taxes and easing
regulations, China is expected
to grow their GDP some 7-8%
this year.
Sure, Canada has a lot of pro-
blems. Their health care sys-
tem is a disaster. Their pro-
gram to digitize all medical
records is ripe with corruption.
They are also handicapped
by the problems of the North
American auto industry. But
an interesting trend is unfold-
ing. A major Canadian chain,
Tim Horton's, which had moved
it's headquarters to Delaware
for tax purposes is now moving
back to Toronto! Why? For
tax purposes! Also to avoid
the ridiculous flow of new Fed-
eral regulations being unleash-
ed by Washington.
Perhaps the most amusing
moment of this past week
was Obama's trip to Russia.
While being manhandled by
Putin and others, Obama was
also scolded by Pravda and
the Russian media. He was
informed that Russia has much
more freedom than the U.S.,
since people can smoke any-
where they damn please!
They invited Obama to light-
up! LOL! This, while Obama
tightens tobacco regulations,
increases tobacco taxes and
now is going to target the U.S.
military's tobacco policies.
China, too, is far more 'liberal'
about allowing people to smoke
as well.
John Clark, one of the heroes
of Tom Clancy's 'Jack Ryan'
and "Rainbow Six" series of
novels, once described how he
rated countries by their
"Saturday nights". The more
fun the better. Perhaps we
can now rate countries by
similar measures. If they
allow smoking in public? Are
their governments cutting
taxes? Reducing regulations?
Lessons to be learned...