This world is going crazy.  If you’ve read this column over the last year you’ll know my views about the sub-prime mortgage mess.  It has more lives than any cat.  Now with the US Congress weighing in and rejecting the $700 billion bailout of Wall Street, markets are plunging.  Is this the big one?  I dunno, however, the critical nature of the American mortgage mess is reverberating in markets around the world.  That whooshing sound you hear is Canadian equity going out the window.
The other thing that bothered me this week was the arts funding cuts, which Stephen Harper has been criticized for especially in Quebec.  In fact its been so heavy in Quebec, Harper showed up there Monday announcing new $150 tax credit for parents who enroll there children in the arts.
The upshot of the uproar over the arts was Stephen Harper’s musing about big arts galas as elitist.  This is what he said in Saskatoon, Saskatchewan.
“I think when ordinary working people come home, turn on the TV and see a gala and all sorts of people at a rich gala all subsidized by the taxpayer, claiming their subsidies aren’t high enough when they know they have actually gone up, I’m not sure that’s something that resonates with ordinary people,” he said. “Ordinary people understand we have to live within a budget.” (Stephen Harper last Monday in Saskatchewan)
Of course that was met with derision from those people who get to go to galas in Quebec.  It was met by derision by the media and its turned Stephen Harper into a bit of a villain.  In fact with me growing dizzy within a combine cab, I even started to think that way.
However, with sub-prime mortgage craziness swirling around in my mind, I had a dose of sober second thought.  One of my best friends and mentors is Publisher John Gardiner.  If you know John, you’ll know that John lives, eats, sleeps and breathes the Arts.  In fact I can’t think of anybody locally who has done as much as John has done and in fact, it isn’t even close.  And I know for a fact, that John has never got a dime from the federal government for his colossal effort for the Arts or has he asked.  However, there is nobody more diligent and deserving of federal financial support for the efforts that he has poured into Wallaceburg and the greater Chatham-Kent community.
Meanwhile the Quebec artists, some whom I can recognize from their television and movie exposure are on stage complaining about not getting their subsidy.  I found it eerily similar to the Wall Street mandarins in the American capital this past week.  They were demanding their $700 billion even though many of them were implicit in the sub-prime mortgage mess.  Wouldn’t it be better to help some of those poor folks pay some of those bad mortgages instead of the bozos who invented them and now want to shirk responsibility for them?
Of course before you can say “agricultural subsidy”, keep in mind of all the tainted milk in China.  We don’t have that here, nor do we have Chinese milk.  So there are places for subsidies in our society.  However, questioning them should be a constant in Canadian society not some abrasion on our Canadian character.
Still, the events of the last week have left an indelible mark on me.  The arts thing is just one of those things, hypocrisy amplified.  This sub-prime, credit crisis, bailout, Wall Street chatter, navel gazing episode in American economic and political circles has really sent me side ways.  For those of you who aren’t interested in the dismal science count yourself lucky.  Let me tell you.  This time around the best economists, financiers, and politicos don’t have a clue.  And I don’t either.
I say that because measuring economic impacts boils down many times to interest rates, inflation, unemployment and measuring the money supply.  “Confidence” is something, which often times are taken for granted.  Confidence in our credit markets has always been something I’ve taken for granted.  However, when big American banks stop lending each other money and actually go broke its big news in these pages.
I’ve said it before.  Credit is the lubrication that makes everything work.  The expectation that you’ll get paid is the grease that makes everything work.  So when institutions like Lehman Brother, Bear Stearns, Fannie Mae, Freddie Mac and others have no money, its like the sky is falling.
The tough part is the incredulousness of it all.  The mess may get much messier, which could mean more job losses for Ontarians, more Canadian equity down the drain and recession.  How do you like the free market now?