“People are correct to perceive there is a serious problem with the housing market,” says blog dog Joe, “but incorrect to believe the solution lies in government intervention. A better solution is to let the market sort itself out (interest rates normalizing) and for people to make better financial decisions, painful as that might be.”
Can’t argue with that. But Canada isn’t in the mood for personal responsibility, and won’t be for a while. Comments here over the weekend proved that. While it’s obvious cheap money, house lust, financial illiteracy, easy credit and a disregard for debt have propelled house prices to the absurd, nobody’s buying it. Instead it’s the fault of flipping realtors, Chinese dudes and lame politicians. While rank speculation is killing real estate, we flame crooked immigrants. Pathetic.
“Bigger picture, I also worry we are collectively losing our way when it comes to our approach to serious political issues,” adds Joe. “With housing and the economy, it troubles me that the majority of people now look to government as a solution to problems best addressed by the private sector or private citizens. The pendulum has swung too far left. The recent elections of Rachel Notley and Trudeau are a symptom of this, not a cause, I think.”
Me too. I take our debate a few days ago about TFSAs as evidence. Why would so many people come here to support the government hacking a tax shelter and thereby increasing taxation? Simple. Investing is hard. It’s risky. Voting for higher pensions is easy. No risk.
The latest example is the moister momentum for a guaranteed annual income, which many of the spawn think will be financed by sucking off others’ RRSPs. They crave a new cradle-to-grave social support, no doubt the reaction to a world in which young people have big debt, uber education, high expectations, lousy jobs and swelling anxiety over ever owning a house or turning into their parents. They’re huge into sharing now. It’s a defence. Shared cars. Shared mortgages. Shared jobs. Shared (public) pensions. Shared economy.
It’s the antithesis of individual ambition. So governments, like those of Trudeau & Notley, are elected to tax the rich more, abandon balanced budgets, go green and replace private enterprise as the creators of wealth and jobs. In a world where people get a minimum annual income their whole lives, then a liveable public pension, where excessive government spending can be amortized into infinity, why worry about TFSAs, stock markets, or investing?
Since the T2 era dawned, I’m seeing a lot more comments like this being directed at me:
“You Conservatives are all the same, it’s all projecting your flaws onto others and worrying exclusively about what’s good for your pocket. Which is fine and dandy on a financial blog where dudes and dudettes come to learn how to get rich, but cut the sanctimonious crap because nobody but a handful of nodding sycophants believe you.:
“You’re just like with Trump. Because you’re a cheerleader for the status quo, which has served you and the people you’re surrounded with well, and you can’t imagine that ever changing. Meanwhile more and more people in western countries have their back against the wall as your lust for money (you previously referred to dividends as “yum” and “delicious”) causes more outsourcing, more short term thinking, and more corporations that are perfectly happy to sell our country out if it means a buck next quarter.”
Oh yeah, and this…
“You talk about all of us having an obligation to save and invest. What happened to personal freedom, Garth? You conservatives love to talk about so called freedom. No matter how pure your intentions might be, you have to understand how it looks when you say that. As an equities peddler and multi-millionaire investor yourself, you stand to gain in two fundamental ways from putting the burden of retirement funding on all individuals. You stand to gain because they will need the help of professionals such as yourself, whereas with state pensions that is unnecessary.”
How can you not love the way the lefties call me a Conservative, and the rednecks dis me as a Liberal? It’s one of my greatest accomplishments. Irritating everyone. It’s also common sense.
Whatever the flavour of government, we’re not moving in the right direction. Real estate’s become a casino in which every player thinks they’ll win. Sinking money into registered retirement funds has crashed and burned. Most people are willing to flip off TFSAs, because they don’t use them. The rest think they’re savings accounts. Our willingness to swallow debt would astound previous generations. Cash reserves are gone. Credit’s endemic. Kids expect nicer houses than their parents. Now. It’s a society of consumption, not denial. Savers and renters bad. Mortgages good.
Today the young truly believe interest rates cannot rise, houses will always go up, they can retire without investing, it’s different this time, deficits will solve themselves and taxes on others – the wealthy and corps – will make it all work. As Joe said, government is now the solution. A year ago it was the problem.
I can’t help but think of hippies sticking flowers in the barrels of cop guns. Beautiful. Doomed.
Well, there ya go. Blaming others – from immigrants to central banks, Boomers, realtors or Americans – is lame. We’re the architects of our own destiny. Together we have destroyed the housing market, borrowed our butts off and elected leaders for the wrong reason. Pointing that out is neither lib nor con.
The young can learn from experience, or think they know it all.
I did once. It was great.