I oppose the Finance Minister’s plan to bail out Canadian banks. I am disappointed but not surprised. In my opinion, the Conservatives should not be rewarded for this transfer of our wealth to the banks. Since Stephane Dion says he would do the same, I think voters should definitely consider not voting for either the Conservatives or Liberals. A revolt against the Conservatives – and Liberals – I believe personally would be a very healthy thing for Canada.
We have all these people believing that the Conservatives are “laissez-faire” blah blah blah and they have their “secret” laissez-faire agenda. It’s so secret, I guess they’ve been disguising it as a market interventionist agenda for a while now. Sure, vote Libertarian if you have a candidate in your area, or vote for another party if you insist, or don’t vote at all.
The government is planning to buy bank-held mortgages through the Canada Housing and Mortgage Corporation (CHMC). The Finance Minister and the Prime Minister claim that these are valuable assets and that the government is going to make money on this transaction. I don’t believe either of those promises.
I don’t believe that government wealth should be redistributed like this. I don’t believe the government should be giving special privileges to big banks. If libertarians are opposed to forced government welfare in general, and interference in the free market (or semblance thereof), we should Even more be opposed to welfare for big corporations. I see this as corporatism. The structure of the society is government working together with big businesses (some of them anyway), fused together legislatively, especially through the banks and those who have the most pull on the government, another example being the auto manufacturers. They receive privileged benefits. Everyone works together, goes along, doesn’t rock the boat, doesn’t seek independence and freedom. Just cover the cracks with whitewash and pretend to be doing something useful instead of doing the right thing.
Regardless of whatever principles the Conservatives might have (”secret” principles I guess), the peer pressure from the U.S. government, European governments and banks is obviously overwhelming Canadian politicians and makes them react to paper over problems like this credit crunch using this kind of socialist intervention.
I’m trying to understand this situation as well as possible. My belief is that the results of this could be inflationary or it could be a drain on taxpayers in some other way. (Have we already had the money taken from us by the CMHC all these years and have they been accumulating it? The topic of the interventionist CMHC needs to be examined closely by Canadians.)
I think that people should stop spending and borrowing now. If credit is supposed to dry up, let it dry up. Let these institutions correct how they do business and who they do business with. Let consumers correct their spending and borrowing behaviors. Don’t interfere. That way everything can adjust. Instead, this interference is going to prolong the problem.
I would recommend reading www.lewrockwell.com, www.mises.org and www.campaignforliberty.com to understand the banking and monetary system better and the problems with it. [NB: actually, in retrospect, I think those sites only provide part of the picture]
Some background information:
Oct. 10: “The federal government’s $25-billion takeover of bank-held mortgages to ease a growing credit crunch faced by the country’s financial institutions is not a bailout …”
Oct. 10: Credit crisis video
Oct. 10: Flaherty announces mortgage plan (includes video). Dion says “too little, too late”
Oct. 10: Star analysis of bailout
Oct. 10: Point of view of the Consumers’ Association (this is another wrong approach but trying to control interest rates is a fundamental mistake in our society so it’s not new)
Oct. 10: Lending Crunch
Oct. 9: Ottawa warned banks
Oct. 11: G7 plan
October 12th, 2008