As the good ship Titanically Overleveraged headed full-steam ahead to a monstrous wall of ice, emotions on deck were mixed.
Republicans had disdained reality ever since they asked Annie Oakley to be a vice-presidential candidate. They insisted that it wasn’t an iceberg floating ahead; it was just a buoyant mountain range. Wouldn’t Rush Limbaugh’s and Oliver North’s faces look great carved there?
Democrats knew the sure way to become election road kill was to increase the regulatory role of the government. They wondered maybe, just maybe, the ship could scrape past the floating glacier without permanent damage. Just like it scraped through the Iraq war with nary a scratch.
Steerage was populated by Canadians who had little or no information about where the ship was headed and had no control over its destination. The ill-fated souls below circulated rumours; The slightest dent in the ship could send it to the bottom, there are only enough life rafts for CAs, Canadians will be trapped on board if the ship capsizes, the frigid water will kill you in 3 minutes at least the beer will stay cold, no use praying, our Canadian banking system wont save us this time.
Except for some theatrical flourishes from James Cameron, this is the situation in which Canadians find themselves vis–vis U.S. financial reform. As mentioned in a previous post, unless the U.S. moves quickly to introduce regulatory reforms to its banking and investing system, the great recession of 2008-2010 will look like a day at the beach compared with the destruction to come.
One only needs to read the headlines about the fraud charges against Goldman Sachs to realize that there are no moral guidelines or strong regulatory bodies to prevent U.S. financial giants from making overtly risky investments that nearly brought down the U.S. financial system in 2008 and may do so again.
So what, you ask? Canadians were somewhat insulated from the financial catastrophe by our more-regulated banking climate but this time around there will be nowhere to hide. This is because if a Goldman Sachs or a Bank of America were to go under, the world would be stuck in a deep depression and there would be little need for Canada’s oil, gas, or metals for years to come.
Your homes value would collapse. You might lose your job. Your investments would deteriorate. Government services we take for granted would disappear. Think about it.
On Thursday, Barack Obama will address Wall Street once again with his plan to make the U.S. financial sector stable and transparent. Many will call his plan just a way for the government to control the entrepreneurial spirit of America. Many Americans continue to seek his real birth certificate. Boston financial analyst Harry Markopolos spent years telling people that Bernie Madoff was running a Ponzi scheme. But as his book No One Would Listen attests, all he ever got were blank looks and a reputation for being a kook.
The tragedy is that unless you terrorize America on a Pearl Harbor or 9/11-like scale, Americans will follow their individualized spirit of uncompromised freedom to do whatever they want damn the consequences.
Unfortunately for Canadians and the rest of the world, the iceberg is coming closer and closer.