Stephen Harper was probably smart not to try feigning an emotional response today over the state of the economy. The Prime Minister would have looked phony.

But did he really need to talk in Toronto like a broker trying to coax a reluctant dentist into risking a few bucks on a hot tip in a bear market?

“I’m not the most emotionally expressive guy, but I understand, I understand in my own family, that people are pretty shocked by developments in the stock market,” he told reporters in Toronto.

“Look,” he went on, “the main thing the government has to do in a time like this is not panic. A lot of people out there are panicking. I think there are probably some great buying opportunities emerging on the stock market as a consequence of all this panic.”

But the market churn, though it’s pretty scary, isn’t really the root worry of most Canadians. What’s got people spooked is the notion that it’s their mutual funds now, but might be their jobs soon. The PM says he understands, but not if he really thinks its about the TSX. It’s about what comes next.

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  1. The DOW, TSX and S&P all lost a digit today. That’s a significant psychological hit that will probably make a lot of board members look at their operations and reconsider expansion plans, or begin considering how to downsize operations.

    Hang on to your hats folks.. you may need them soon to collect change.

  2. John Geddes,

    Please do enlighten us on what comes next. Since in the main journalists are unable to make to distinctions on the economy which absolutely floor me, I tend to pay little attention to their ramblings. Over and over, I hear them say the “economy is in surplus”, when it is the Federal Government, and then I hear them say the economy is tanking, when it is the TSX.

    Mr. Geddes, is Europe and America in trouble? Yes. Are we? Yes, but only insofar as that our customers are going to be poorer, not because of any weakness in our banking system, ergo, it is also out of the Canadian Government’s control. I tell you what, I can’t get the PM to hold your hand and rub your back, but i can point you to places in Toronto where you can get that done, and they will really, really mean it.

  3. And those “great buying opportunities” have come at the cost of some of the most poorly-strapped Canadians, including seniors.

  4. Chrystal, if seniors are so heavily invested in equities, despite enough common sense out there telling you to have more safety in your wealth as you age, then, here I am at my sympathetic emotional best: tough on you, you screwed up what’s left of your own future. Why is that Harper’s problem?

    It is not the job of the PM to push the TSX to infinite. If enough Canadians feel that is the job of a PM, then we deserve the mess we’ll get.

  5. madeyoulook,

    It’s Harper’s problem because he and his (neo-liberal) ilk are the guys that urge ending government-sponsored pensions in favour of individual self-directed retirement investment–all the while pushing for deregulation of the very markets that steal money from shareholders that are saving for their retirements.

  6. the very markets that steal money from shareholders that are saving for their retirements.

    Last I checked, no one held a gun to an investor’s head: “If you wanna live, you’ll buy a thou of BMO at forty-and-an-eighth.”

    If an investor doesn’t like a business, then he or she should not invest in it. If Stomach turns at being down ten percent between statements, then Brain shouldn’t have bought the equity mutual fund in the first place. If no one should ever suffer for a stupid decision, you will have far more widespread suffering instead.

    Placing greater responsibility over an individual’s future on the individual is only Harper’s “problem” if you think so poorly of the average Canadian that he or she cannot possibly be trusted with responsibility over his or her own life.

    I only wish more Canadians had enough faith in their fellow Canadians.

  7. Peter: “not because of any weakness in our banking system”

    Peter, you are foolish indeed to believe this.

  8. Ian,

    Which Canadian bank needs a bailout? Armwaving doesn’t impress me.

  9. madeyoulook,

    So all those people who invested in income trusts in the belief Harper WOULD NOT tax them made stupid decisions?

  10. Ian will now provide evidence of the imminent collapse of a major Canadian bank, maybe two, given his assertion that it is foolish to believe there is a weakness in our banking system.

    Now, admittedly, I am still at work, but if CIBC hung signs on all their locked doors saying “no more loans to anyone, and we are invoking our right to delay withdrawals by up to thirty days…” I have no doubt it would have made the news.

    So, Ian, please enlighten us all. Many thanks.

  11. Stop fighting, you guys! You’re upsetting the market.

  12. Archangel, the income trust issue was not the market “stealing” from shareholders (your original words). But if you must change the subject:

    Harper screwed up on his promise, the unfair tax advantage was threatening to throw a huge chunk of the economy into one inappropriate framework solely for the tax dodge, and Harper RESPONSIBLY decided to break his promise for the good of the country. Investors did indeed take a hit, to the extent that the unfairness was corrected. Harper mitigated by grandfathering over a certain length of time, pandering with an income-splitting if you are of a preferred age, etc. But no question investors seeking an advantage because of an unfair federal government rule took a hit when it was corrected.

    But don’t go blaming the market for that. Blame the original market distortion treating income trusts differently in the first place. Blame Harper for incorrectly promising to maintain that distortion. Credit him for ultimately getting it right, just like the non-scrapping of the GST by the predecessors.

  13. madeyoulook,

    I will admit to bad syntax–I blame deregulation for allowing a segment of the market to take advantage of (steal from) shareholders.

    May point is the incongruity of so much current thinking on the right. Let the chickens range free, and while were at it, why not leave a hole in the fence for the fox–because we think the foxes will mend the fence.

  14. My point–not may point. Doh!

  15. I blame deregulation for allowing a segment of the market to take advantage of (steal from) shareholders. Well, you’re still wrong. There was no gun to the head of any shareholder that I am aware of. Because if there was, surely it was registered and — oops, veering off topic, will stop now.

    Let the chickens range free, and while were at it, why not leave a hole in the fence for the fox–because we think the foxes will mend the fence. Hoo boy, pretty metaphor, please enlighten us as to who the fox is. But in any event, my friend and everybody’s now vanquished enemy (capitalism — remember capitalism? ahhh, those were the days) is supposed to kill off the weak and stupid economic activity in favour of more successful economic activity in the marketplace. If there is no natural predator (fox, creative destruction), that’s no good for the population of chickens as a whole.

  16. ‘It’s about what comes next.”

    More jobs have been created this year than have been lost and I think that’s about all we can ask of the government. To create an economic environment where businesses want to hire people.

    Dion wants to raise taxes, which he claims will lead to investment in ‘green’ technology. Raising taxes does not lead to investment and job creation, which we have seen over and over and over, it leads to companies not hiring or leaving the country entirely but Dion expects us to believe otherwise.

  17. But, but, but, but, jwl, the Green Shift is supposed to be revenue neutral. The government is not sucking any more money out of the economy, remember? He’s just taking it from everybody and giving some back to the rural the Northern and the poor (the Preferred Polluters).

    Since you get more of what you subsidize, I guess we would then end up with more rural, more Northern and more poor. Ain’t that a sure-fire way to prime the pump of an economy…

  18. jwl: The only reason that there are more jobs this month than last month is because there happens to be an election on, and Elections Canada hires a heck of a lot of people for that.

    And what Dion is claiming will create jobs is the corporate tax relief that comes along with the green shift. Just with the additional carbon usage fees that will be applied, those jobs will most likely be green.

  19. Another (probably futile) attempt to distract the ESL class for inkless irregulars (see Art Class for failed attempt number 1).

    ISSUE: should the prime minister of Canada be the country’s broker-in-chief? Should the PM be the hero if investors foolishly build up a bubble? Should the PM suddenly be the goat when (not if) that bubble goes pop?

  20. MYL has a point. It’s common for the PM to talk up the economy, but this has to be done responsibly and in keeping with reality. If this is to quell panic, then there’s that, but what metrics could he be going by to suggest that this sell off is irrational, and that the TSX is thus undervalued? Particularly when commodities are being hammered in this process, so all of those mining firms who dominate the TSX (remember Potash Corp last week?) are forced lower by an international move in the markets.

    So what is Harper’s rationale for saying this? What are his reasons? Turning it around, you won’t see any TSX CEO say such sunny things this week. Why? Because it could easily get them sued or fined. Harper should act just as responsibly – being Prime Minister shouldn’t be an invitation to self-serving fantasy.

  21. Act responsibly? Harper hasn’t taken responsibility for any actions that are photo-op-esque. Perhaps he and flim-flam were looking at Ontario as some meagre stock on the exchange when they said ‘wouldn’t invest in Ontario.’
    From one week, the economy is sound, to the next week, there are some troubles but essentially we’re sound, to this week, well, get ready for the bargains! He sounds like a junior stock broker hoping to open his umbrella on the right day.
    Let’s hope he’s wrong.

  22. I think the point here is that the PM’s “opportunities” remark demonstrates that he is really not the brilliant, measured strategist he is so often made out to be. I am pretty sure that for many millions of people, the opportunity to pick up some bargains on the market is the last thing on their mind just now.

    For his opponents, who like to characterize the PM as cold and heartless and out-of-touch with so-called average Canadians, this remark, especially at this stage of the campaign, is a huge gift.

  23. For Peter and myl:


    Feds warned banks: Flaherty

    The federal government warned “a couple” of Canadian banks that their capitalization levels were on the brink of falling below accepted standards long before the credit crunch disintegrated into an outright global financial crisis, Finance Minister Jim Flaherty disclosed today.

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