Editor, The Times:
Canada’s big banks hit rock bottom in the ’08 recession due to the same securitized mortgage fiasco that trashed the U.S. banking system.
A study by the Canadian Center for Policy Alternatives revealed, in 2012, that the Harper Government had poured $114 billion, equivalent to $3,400 for every Canadian, into the banks to keep them afloat.
Three of the banks could have been purchased outright for less than they had received in the bailout.
So effective was the cap on information coming from the Harper government that nothing appeared in the press until the CCPA study was published, four years after the fact. Even after its publication, very few articles surfaced in the Canadian press.
Harper’s strangling of information has effectively stymied any analysis that might answer questions that should concern Canadians.
For example, what effect has this bailout had on government deficits and on the poor performance of the Canadian economy which has, once again, entered a recession? We’ve heard a lot about the government’s Economic Action Plan but, which programs had to be cancelled due to the huge sums had been diverted to rescue the banks?
And, which banking policies or mismanagement were responsible for the disastrous performance that required this infusion of taxpayers’ money? Just whose butt is being covered here; the government’s lack of regulation, or mismanagement by the banks?
By 2010, much of the bailout money had been repaid, however, the $69 billion doled out through mortgage insurance programs was not. Central Mortgage and Housing simply bought up the bad mortgages in hopes of recovering the cash when the mortgages matured.
How much taxpayer money is still tied up in abandoned, deteriorating real estate? How much was lost when the houses were sold off for at fire sale prices? Which were the greatest geographic concentration of these mortgage defaults and what caused homeowners to walk away from their homes?
Evidently, moving the mortgages from the banks’ own “accounts receivable” column to that of the government’s was a major coup for the banks. The bank CEOs, already earning about $10 million each, were rewarded with hefty raises shortly after the bailout.
But, this coup was enabled by the Harper government’s curious ideological blend of free market capitalism and corporate socialism; fewer and fewer rules but ever growing taxpayer safety net for bad management.
For Harper, it seems that running the country takes a back seat to serving the interests of Big Business.
Harper’s ability to properly manage the economy is highly fictional but it makes good reading, every bit as good as Alice in Wonderland.