Entries from January 2009 ↓

Well, so much for that. Obama he ain’t.

As I tarred the 401 Tuesday night, getting out of Toronto as fast as possible, back to the safety of my bunker and beckoning squirrel stew, it was clear what comes next. The federal budget will keep the Conservatives in power, but it sure won’t be saving any jobs.

Expert commentary is all over the place, but this is my take: Our country blew a big chance to do something dramatic and restorative. Like drop income taxes for six months. Or build a smart electrical grid – renewable energy-ready. Or get the hell out of Afghanistan early. Or give a billion to that spunky little electric car company. Or declare a moratorium on home foreclosures for unemployed families. Or make the provinces set aside land transfer fees or property tax for a while, in return for fed funds.

The consequences of the budget seem clear. There will be no recovery in 2009, in fact, things will just get worse. Housing values will fall after listings jump higher in the next 90 days. Lots, lots, lots more people will be out of work – and five more weeks of pogey will hardly matter. Middle-class families will wisely pull in their horns, reduce spending and brace for a storm. That, as you might imagine, will further tank car sales and empty the malls. After all, when single-income families making $80,000 get a tax cut of just $207 a year, where’s the stimulus?

At this critical moment, a lot comes down to confidence. Confident people buy new minivans and bungalows, taking on new car loans and mortgages. It doesn’t matter how cheap the Bank of Canada makes money or how much credit the banks are willing to lend, if families fret over the future.

So, as the godless towers disappeared in my rear view mirror, I was weighing a question I’ve been asked in almost every media interview I do for my new book. What, I am asked, are the odds of this getting worse? Of a depression, however brief?

My answer to date has been 10% to 15%, but now I’d say we just jumped another five points.  This does not mean a deflationary spiral is going to happen, just that one’s no longer improbable or impossible. There will be no immediate consequences of this event in Ottawa. Economists will debate the thing for months – long after the details have been forgotten, except for those people who want save thirteen hundred bucks in taxes by building a $10,000 deck.

Since I`m not Jim Flaherty, I can tell you this with honesty: If you have been thinking about selling a house, do it now. Be aggressive and realistic. If you were planning on buying one, wait. If you have cash, hang on to it. If you’ve not made your RRSP contribution, do it. If you have debt, attack it. If your mortgage is due, go variable, go weekly. If you need something, buy it, but don’t finance it. If you have a job, love it. If you’re on strike, stuff it.

As I reached my cabin, locked the gun rack and smelled that aroma, I was also reminded of this: Be prepared. Take control.

Besides the fact he’s a pussy biker who rides a sports machine and likely wears a pretty leather jumpsuit, George Strombopolous has his serious attributes. The host of CBC-TV’s award-winning The Hour is showing considerable maturity and insight by inviting me on his show on Tuesday evening to discuss, I think, my latest book and various squirrel recipes.

Interestingly enough, I was on the George show once before, a day or two after my ass was thrown out of the Conservative caucus by Stephen Harper. The prime minister alleged I had breached some kind of caucus secrets (like he ever tells his MPs anything), but in reality I had been dooced – fired from my job in Parliament because I was sharing my experiences with Canadians through a blog.

At the time I thought using a medium like this to engage, inform and involve people in their own government was a good idea. Silly me. My Conservative colleagues practically nailed me to that big stained oak cross they keep in the corner of the caucus room. The PM’s chief of staff threatened me with being thrown out unless I stopped blogging, and Harper himself said I was a lousy MP because I’d once been a journalist, and “they just want to tell the truth.”

Anyway, Strombo was cool and supportive and I appreciated getting a chance to explain my side of things. Not that it made a lot of difference. I still turned out to be a political failure, tossed out by the voters after I wrote a book telling them their houses were about to drop in value. Who would have thought? Sheesh.

In any case, I hope we talk a little Tuesday night about some of the things that should grab his young audience. Like how governments falling tens of billions into instant debt should piss off every 25-year-old in the country – the folks who will actually pay the taxes to finance this extra debt. Or how the greedy Baby Boomers and their obsession for housing created an asset nobody can afford any more. Or how the feds dreamed up our very own Canadian subprime mortgages – 0/40 loans – which suckered tens of thousands of young buyers into unrepayable debt, and no equity.

Or the real story, which is the effects of climate change over the next decade, which will make the economy look like a ride in the park. Yeah, on a girl bike.

CBC, Tuesday, 11 pm.

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