The siren call

Trust me, this is not a politics blog. Way too dangerous. Besides, that might just get the anti-vaxers irritated enough to mount a protest in front of my yacht. And how embarrassing would that be?

Nah, let’s just do politics from the standpoint of money. Who is better for your personal finances? (It won’t be Jagmeet.)

Without a doubt, Bay Street wants the Cons. Look what the capitalism-loving Bloomberg site has to say about Justin Trudeau. “His proposals will backfire, stifling growth and diverting attention from solutions that would actually help solve the problems that people care about.” In fact the comparison is being made between T2 and Trump, with both reaching into the emotional and tainted well of populism to yank out ideas that trigger followers without solving anything.

Like banning foreign house buyers amid evidence no prices will drop (and non-residents are already taxed to the max in the GTA and YVR). Or whacking the banks more because they’re making money and are easy, captive targets.

So we’re told to be wary of any politician that pits “the people” against “the elites.” Bloomberg cites an academic paper that analyzed the effect of populism on economies. Not good. Ever.

The economists found that countries lost around one percentage point of economic growth every year after a populist came to power. This underperformance existed relative both to each country’s long-run growth rate and to the current global growth rate, and held for at least 15 years. They concluded that after a decade and a half, national income per person was 10 per cent lower than it would have been if a populist hadn’t come to power.

“Rising economic nationalism and protectionism, unsustainable macroeconomic policies, and institutional decay under populist rule do lasting damage to the economy,” they said.

In case you hadn’t noticed, after six years in power the Libs are now running against Jeff Bezos, the Big Six, the wealthy and the “special interest and Old Boys network” that Conservatives apparently genuflect to. Jagmeet is doing the same. NDP supporters eat this stuff up, but for the Liberal party leader, it’s not working. On Monday the O’Toole gang pushed two points ahead of the governing party in the poll tracker. This may be because the prime minister is not running on his record. He can’t. Fiscally, it’s a disaster.

Houses cost 70% more under his watch. The deficit is off the charts. Taxes are rising. The accumulated debt is terrifying. Inflation has surged to almost 4%. And – suddenly in the last week – consumer confidence took a big tumble. The latest Nik Nanos poll shows that after hitting a high in July, the confidence people have in the future has been steadily ebbing. Maybe that’s pandemic ennui. Perhaps it’s delta. Could be the catapulting cost of just about everything. And the election itself is an unwanted irritation, feeling tawdry and manipulated.

Whatever. Things have changed. Voters seem more resistant to politicians telling them there’s a bottomless pot of money to throw at everything. Says Nanos:

The share of Canadians who see the economy strengthening over the next six months fell to 37 per cent last week, down from 54 per cent at the beginning of July. Just over 20 per cent of Canadians say their personal finances have improved over the past year, down from 26 per cent last month.

Canadians are also less optimistic about the housing market. About 51 per cent say they expect home prices to increase over the next six months, which is the lowest score for that question since February.

Why? Because it’s clear many have arrived at the inescapable conclusion there’s no political solution to the real estate mess. The FHTSA Frankenaccount won’t do it. Kicking Chinese dudes to the curb won’t, nor will giving buyers grants to cover closing costs or spanking realtors for blind auctions. This just all adds to demand without augmenting incomes or creating more supply.

Says Toronto realtor John Pasalis (who hates my guts): “No party wants to trigger a decline in home prices, which means the only way we can restore affordability is for home prices to stall and allow incomes to catch up. But no party wants to do that because rising home prices and household debt drives our economy.”

Truth there. Conundrum.

Sorry, kiddos, but the odds of an under-40-only tax shelter with full-deductibility for contributions, taxless growth and tax-free withdrawals for a house purchase are melting faster than my tolerance for the no-vax whackadoodles. There is no silver bullet. The budget will not balance itself. And political ‘solutions’ of the past few years have only exacerbated things. The Chinese buyers didn’t make this happen. Nor did the banks. Or Bezos. Or any elite of corporate overlords.

Trump lied, pandered and paid the price. Boris Johnson hobbled the UK with his populist Brexit dreamweaving. And Bolsonaro just jumped Brazil’s inflation rate by 50%. Populism is political failure. Economic decay follows. Remember these days.

About the picture: “My son in Red Deer adopted a part German Shepherd part Belgian Malinois as a companion for his year old white Shepherd/Lab/Husky Sunny,” writes prequest poster DB. “This is River. She is the cutest, smartest, and most mischievous pup, ever. My second granddog! So proud!”