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Author Topic: Worthwhile Canadian Initiative  (Read 1252 times)

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Offline WestCoast

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Worthwhile Canadian Initiative
« on: March 14, 2009, 09:38:43 AM »
 Sponsored ByWorthwhile Canadian Initiative
Canadian banks are typically leveraged at 18 to 1--compared with U.S. banks at 26 to 1.

Fareed Zakaria
NEWSWEEK
From the magazine issue dated Feb 16, 2009
The legendary editor of The New Republic, Michael Kinsley, once held a "Boring Headline Contest" and decided that the winner was "Worthwhile Canadian Initiative." Twenty-two years later, the magazine was rescued from its economic troubles by a Canadian media company, which should have taught us Americans to be a bit more humble. Now there is even more striking evidence of Canada's virtues. Guess which country, alone in the industrialized world, has not faced a single bank failure, calls for bailouts or government intervention in the financial or mortgage sectors. Yup, it's Canada. In 2008, the World Economic Forum ranked Canada's banking system the healthiest in the world. America's ranked 40th, Britain's 44th.

Canada has done more than survive this financial crisis. The country is positively thriving in it. Canadian banks are well capitalized and poised to take advantage of opportunities that American and European banks cannot seize. The Toronto Dominion Bank, for example, was the 15th-largest bank in North America one year ago. Now it is the fifth-largest. It hasn't grown in size; the others have all shrunk.

So what accounts for the genius of the Canadians? Common sense. Over the past 15 years, as the United States and Europe loosened regulations on their financial industries, the Canadians refused to follow suit, seeing the old rules as useful shock absorbers. Canadian banks are typically leveraged at 18 to 1—compared with U.S. banks at 26 to 1 and European banks at a frightening 61 to 1. Partly this reflects Canada's more risk-averse business culture, but it is also a product of old-fashioned rules on banking.

Canada has also been shielded from the worst aspects of this crisis because its housing prices have not fluctuated as wildly as those in the United States. Home prices are down 25 percent in the United States, but only half as much in Canada. Why? Well, the Canadian tax code does not provide the massive incentive for overconsumption that the U.S. code does: interest on your mortgage isn't deductible up north. In addition, home loans in the United States are "non-recourse," which basically means that if you go belly up on a bad mortgage, it's mostly the bank's problem. In Canada, it's yours. Ah, but you've heard American politicians wax eloquent on the need for these expensive programs—interest deductibility alone costs the federal government $100 billion a year—because they allow the average Joe to fulfill the American Dream of owning a home. Sixty-eight percent of Americans own their own homes. And the rate of Canadian homeownership? It's 68.4 percent.

Canada has been remarkably responsible over the past decade or so. It has had 12 years of budget surpluses, and can now spend money to fuel a recovery from a strong position. The government has restructured the national pension system, placing it on a firm fiscal footing, unlike our own insolvent Social Security. Its health-care system is cheaper than America's by far (accounting for 9.7 percent of GDP, versus 15.2 percent here), and yet does better on all major indexes. Life expectancy in Canada is 81 years, versus 78 in the United States; "healthy life expectancy" is 72 years, versus 69. American car companies have moved so many jobs to Canada to take advantage of lower health-care costs that since 2004, Ontario and not Michigan has been North America's largest car-producing region.

I could go on. The U.S. currently has a brain-dead immigration system. We issue a small number of work visas and green cards, turning away from our shores thousands of talented students who want to stay and work here. Canada, by contrast, has no limit on the number of skilled migrants who can move to the country. They can apply on their own for a Canadian Skilled Worker Visa, which allows them to become perfectly legal "permanent residents" in Canada—no need for a sponsoring employer, or even a job. Visas are awarded based on education level, work experience, age and language abilities. If a prospective immigrant earns 67 points out of 100 total (holding a Ph.D. is worth 25 points, for instance), he or she can become a full-time, legal resident of Canada.

Companies are noticing. In 2007 Microsoft, frustrated by its inability to hire foreign graduate students in the United States, decided to open a research center in Vancouver. The company's announcement noted that it would staff the center with "highly skilled people affected by immigration issues in the U.S." So the brightest Chinese and Indian software engineers are attracted to the United States, trained by American universities, then thrown out of the country and picked up by Canada—where most of them will work, innovate and pay taxes for the rest of their lives.

If President Obama is looking for smart government, there is much he, and all of us, could learn from our quiet—OK, sometimes boring—neighbor to the north. Meanwhile, in the councils of the financial world, Canada is pushing for new rules for financial institutions that would reflect its approach. This strikes me as, well, a worthwhile Canadian initiative.

URL: http://www.newsweek.com/id/183670
© 2009
Whatever you do, do it to the purpose; do it thoroughly, not superficially. Go to the bottom of things. Any thing half done, or half known, is in my mind, neither done nor known at all. Nay, worse, for it often misleads.
Lord Chesterfield
(1694 - 1773)

Offline ribbit

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Re: Worthwhile Canadian Initiative
« Reply #1 on: March 15, 2009, 06:38:17 PM »
the usa is the greatest country in the 6000 year history of the earth. zakaria just trying to make trouble.

Offline WestCoast

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Re: Worthwhile Canadian Initiative
« Reply #2 on: March 15, 2009, 06:51:08 PM »
the usa is the greatest country in the 6000 year history of the earth. zakaria just trying to make trouble.
I waiting for a more quantified response than that man :devil: :devil:
Whatever you do, do it to the purpose; do it thoroughly, not superficially. Go to the bottom of things. Any thing half done, or half known, is in my mind, neither done nor known at all. Nay, worse, for it often misleads.
Lord Chesterfield
(1694 - 1773)

Offline Bakes

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Re: Worthwhile Canadian Initiative
« Reply #3 on: March 15, 2009, 07:16:34 PM »
This isn't another thread about hockey or maple syrup is it?


Sorry... didn't read all ah dat, no pictures.

Offline WestCoast

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Re: Worthwhile Canadian Initiative
« Reply #4 on: March 15, 2009, 07:26:57 PM »
This isn't another thread about hockey or maple syrup is it?


Sorry... didn't read all ah dat, no pictures.
howzat!!!



I ent like dis at all
I find ya becoming very unpredictable when it come to these types of threads :devil:
Whatever you do, do it to the purpose; do it thoroughly, not superficially. Go to the bottom of things. Any thing half done, or half known, is in my mind, neither done nor known at all. Nay, worse, for it often misleads.
Lord Chesterfield
(1694 - 1773)

Offline Bakes

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Re: Worthwhile Canadian Initiative
« Reply #5 on: March 15, 2009, 07:47:11 PM »
howzat!!!



I ent like dis at all
I find ya becoming very unpredictable when it come to these types of threads :devil:

Looks like Canada finally found a cure for the common cold weather...  :beermug:

truetrini

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Re: Worthwhile Canadian Initiative
« Reply #6 on: March 15, 2009, 08:21:25 PM »
That is a man..a damn cross dressing, Canuck, Maple Syrup slurping MAN!

Anyway about the article, while Canada applied common sense to regulations in banking, please don't think that there were no voices in teh US crying for restraint and the very same regulations!

Trouble is the damn Republicans!

What the hell is wrong with giving home owners the right to deduct interest on their home leans?

I know!

In Canada they tax the shit out of you at every turn to subsidize their always broke (as in no cash) health system!

The article assumes that the US is also as UNDERPOPULATED as Canada is.  In the US highly skilled people ARE allowed in, the sad truth is if the US had as liberal an immigration policy as Canada, Canada would be even more underpopulated!

who the hell would go there then?  When they have the opportunity to come to the US?

The US has plenty enough of terror groups right here...now we have to have eagle eyes watching the border to the north because so many damn terrorists are targeting us from there!

There is a growing body of evidence indicating that terrorist groups have been operating effectively in Canada by taking advantage of Canada's liberal immigration and political asylum policies and the porous Canadian-American border.

Terrorist-related activities in Canada include fundraising, lobbying through front organizations, providing support for terrorist operations in Canada or abroad, procuring weapons and materiel, coercing and manipulating immigrant communities in Canada, facilitating transit to and from the U.S. and other countries, and other illegal activities.

According to an August 2002 report of the Canadian Security Intelligence Service (CSIS), "… with the possible exception of the United States, there are more international terrorist organizations active in Canada than anywhere in the world.


I can assure you that Canada will soon enough change their liberal views on immigration...watch the ride!

Offline ribbit

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Re: Worthwhile Canadian Initiative
« Reply #7 on: March 16, 2009, 04:37:08 PM »
the usa is the greatest country in the 6000 year history of the earth. zakaria just trying to make trouble.
I waiting for a more quantified response than that man :devil: :devil:

from what i've heard, chretian, martin and the liberals get some of the credit for preventing the bank mergers that alot of the industry wanted a few years back. this indirectly reduced the total exposure of the canadian financial system.

and having the world's biggest trough in washington d.c. doh help!

Offline ribbit

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Zakaria: Obama is failing in his role as leader of the free world
« Reply #8 on: April 05, 2009, 01:41:24 PM »
look ... more mess from fareed zakaria. just wait - let he try to cross the border the cbsa go ban he arse!

==
Zakaria: Obama critics have it wrong

(CNN) -- President Obama on Friday called on Europe and the United States to drop negative attitudes toward each other and said "unprecedented coordination" is needed to confront the global economic crisis.

Speaking at a town hall meeting in Strasbourg, France, on his first overseas trip as president, Obama said, "I'm confident that we can meet any challenge as long as we are together."

Obama's comments came after the Group of 20 meeting in London, England -- which the president called "a success" of "nations coming together, working out their differences and moving boldly forward" -- and on the eve of a NATO summit in Strasbourg marking that organization's 60th anniversary.

Author and world affairs expert Fareed Zakaria spoke to CNN about the G-20:

CNN: What do you think of President Obama's trip to the G-20?

Fareed Zakaria: Although he brought a lot of star power -- the talk of the week -- at least in certain circles in Washington, New York and London -- has been that President Obama is failing in his role as leader of the free world. British columnist Jonathan Freedland wrote in The Guardian newspaper that President Obama looks neither like JFK nor FDR but rather JEC -- that's James Earl Carter -- better known here as Jimmy Carter.

CNN: But it appears everyone is fawning over him.

Zakaria: President Obama has encountered a Europe that is more resistant to his policy proposals. The French and Germans have their own proposals. The Chinese and Russians have come with their own demands. And everyone expects him to apologize for having caused this mess in the first place.

CNN: But can they blame him for the mess?

Zakaria: Of course not. He didn't cause this mess, and no one really blames him personally. The problems President Obama is facing on the world stage have nothing to do with him. They are really a sign that personality cannot trump power in the world of realpolitik. The real story here is that power is shifting away from American dominance to a post-American world.  Watch: James Baker on Obama's performance as president »

CNN: Are you just plugging your book?

Zakaria: Well, that was the argument of the book I wrote last year -- "The Post-American World" -- but what I had outlined is coming true. The evidence for this just keeps piling up.

CNN: Before you outline the evidence, remind me of the basic premise of your book.

Zakaria: It's that the rest of the world is rising to meet the United States' position -- economically, politically and culturally. I want to be clear that I am not talking about America's decline as much as the rise of the rest. While we stayed comfortable in our status quo position, the rest of the world was learning from us and are playing our game and succeeding in it.

CNN: OK. Now give me the examples from the G-20 meeting.

Zakaria: Let me name two things that struck me.

First, the Chinese have called for a new reserve currency to replace the dollar. This would never have happened 10 years ago -- back then, they needed America too much.

Then the French and Germans have said they want a new system of financial regulation that will replace the American-style one that has reigned for the last 20 years.

Why are the flexing their muscles? Because they can.

CNN: Is this happening because of the financial crisis?

Zakaria: The trends were there before, but it appears the financial crisis has accelerated the process. So we are entering the post-American world much faster than even I had anticipated.

CNN: Should we be scared?

Zakaria: Fear should not be our response. We need to recommit to our strengths. America's great -- and potentially insurmountable -- strength is it remains the most open, flexible society in the world, able to absorb other people, cultures, ideas, goods and services.

The country thrives on the hunger and energy of poor immigrants. Faced with the new technologies of foreign companies or growing markets overseas, it adapts and adjusts. When you compare this dynamism with the closed and hierarchical nations that were once superpowers, you sense that the United States is different and may not fall into the trap of becoming rich and fat and lazy.

CNN: What should the U.S. do?

Zakaria: The United States needs to make its own commitment to the system clear. For America to continue to lead the world, we will have to first join it. President Obama seems to understand this and is doing his best at meetings like the G-20 and the NATO summit.

It is also imperative that more Americans become aware of what is going on in other places -- the other 90 percent of the world.

 

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