Flaherty warns Europe : mêlez-vous de vos affaires !

Ce que je dirais à M. Flaherty, c’est de se mêler de ses affaires.

Le Canada a assez de problème, en camouflant les déficits structurels sur le dos des provinces, alors qui règle ces problèmes avant de faire la morale sur le dos des autres.

Le journaliste Terence Corcoran du Financial Post lui donne une sérieuse leçon, c’est peut-être
les politiciens qui est la cause du problème.


‘Time running out,’ Flaherty warns Europe

In a blistering speech delivered in Dublin, Ireland, Mr. Flaherty called on Europe to finally make the tough decisions that are needed to gain control of the crisis and restore confidence in the markets.0

“What started as a sovereign debt crisis in smaller countries in Europe in the spring of 2010 has now spread to larger European countries, causing extreme stress in the European financial sector and threatening global growth,” according to a prepared text of Mr. Flaherty’s speech.

Mr. Flaherty delivered the same message at a meeting of G20 finance ministers in Paris on the weekend, and has been saying much the same thing for the past several weeks.

“Sadly, time is running out and the message still needs to be repeated. A definitive solution that could have been delivered before the G20 meeting this weekend in Paris has been promised by the Cannes summit. Quite frankly, Europe’s response over the past year has been disappointing,” Mr. Flaherty said.

“To be clear, this crisis could have been contained.
Instead, it was allowed to grow. ”


Extrait de: Lessons from the crisis, Terence Corcoran, Financial Post, Oct 17, 2011

The corporatist-government complex deserves review

As Finance Minister Jim Flaherty tongue-lashes Europe for failing to deal with its debt crisis, as Occupy Wall Street demonstrators call for the dismantling of global corporatism, and as stock markets swoon on grim profit, growth and debt outlooks, let’s take stock of the common element in all this: the abandonment of markets and the embrace of massive government intervention.

Banks and corporations are taking the ideological hit for the world’s financial crises and ethical failures, but the common element in these converging international growth crises isn’t the corporate sector. Blaming the banks is now a common theme among demonstrators and some academics. Those greedy bastards is the basic theme from Roger Martin, dean of the Rotman School of Management.

Writing for Reuters the other day, Mr. Martin said leading U.S. financial institutions knowingly peddled shoddy mortgage-backed security products to unsuspecting customers. In Europe, he said, the financial system continues to “teeter on the brink due to the massive bank losses and bailouts.”

Mr. Martin, aligning himself with the people in tents on Wall Street and around world, claimed that the reason bankers got into these messes was to line their pockets via rotten compensation and stock-option schemes.

Even if bank compensation plans were a mess, it takes a lot of wilful denial of reality to reach such a conclusion. Indeed, it ignores the heart of the story.

Europe’s banks are not collapsing because of banker excess. They are collapsing because of massive government debts that governments cannot repay.

It’s not a banking crisis, it’s a statist crisis created by sovereign nations whose politicians borrowed trillions to pay for vote-buying programs that were beyond the ability of the nations to carry.

Mr. Flaherty, speaking Monday in Ireland, seems to have a clear fix on at least the root of Europe’s problem. “What started as a sovereign-debt crisis in smaller countries in Europe in the spring of 2010 has now spread to larger European countries, causing extreme stress in the European financial sector and threatening global growth.”

The expanding crisis, said Mr. Flaherty, has now claimed the Franco-Belgium bank, Dexia. What were the crimes of Dexia’s bank executives? They dispensed huge quantities of depositors’ and investors’ money to governments. Dexia specialized in lending to the public sector, in Europe and the United States. That lending was within international banking rules and even came with the general sense that sovereign debt was rock solid. Rating agencies, as required by governments, approved.

Blaming CEO compensation and greed for global banking’s crisis is like blaming hockey players for fighting. Government’s wanted trillion-dollar cash flows, and bankers provided what governments wanted. Sometimes governments forced banks, via regulation and policy, to take on government debt.

The U.S. mortgage story, as everybody now knows, is not a banker-compensation story. New York Times columnist Gretchen Morgenson and Joshua Rosner in their book Reckless Endangerment place blame for the U.S. housing fiasco on many heads, including bankers. But there is no doubt that the rotten soul of the U.S. mortgage crisis was the U.S. government.

As they say in the blurb for their book, the crisis

“is the story of what happens when Washington decides, in its infinite wisdom, that every living, breathing citizen should own a home.”

It’s also the story, one might add, of what would happen on even grander scales if governments were to enact policies to meet some of the equality demands of Wall Street occupiers.

The government mortgage funding vehicles, Fannie Mae and Freddie Mac, became fountainheads of corruption. They moved money to members of Congress, handed out patronage and paid for biased research that appeared to justify gross reductions in credit quality as a safe proposition that would serve a greater national purpose — homeownership for all.

That bankers went along with this escalating lunacy should be a lesson to all bankers and to corporate executives everywhere. When the unstable tower of debt collapsed, it took down vast portions of the U.S. and global financial system.

Ultimately, U.S. mortgage debt and European sovereign debt both grew exponentially around the belief and understanding that, in the end, the state stood behind the liabilities. As everybody now knows, taxpayers do not share the idea that they are responsible.

So, let’s assume the original motives of the Occupy Wall Street crowd — to end corporate-government connections and reverse the rise of corporatism — are genuine. If that’s the true objective, then there’s lots to talk about. The U.S. mortgage crisis was brought on by government-corporate campaigns to boost home ownership through corrupt government guarantees.

Corporatism, the idea that governments and corporations work hand in hand, deserves a good public review. How about all that corporate influence over government green policies, where hundreds of billions of dollars in tax dollars are going to support energy projects that are the equivalent of bad mortgage loans? If the objective of Wall Street occupiers is to put an end to such symbiotic but self-destructive corporate-government relationships, green corporatism is a good place to start.