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Monday, December 21, 2009

Private gain, public pain: Corporate Canada betrays taxpayers

The Globe and Mail is reporting that:

Canada's corporate executives stand firmly behind Ottawa's decision to pump billions of stimulus dollars into the economy, and they aren't seriously worried about the huge budget deficits that are piling up.

Senior executives who responded to the latest C-Suite survey say the stimulus spending was the right move at the right time to get the economy moving again, despite the creation of a federal deficit of more than $55-billion this year – with more shortfalls to come.

Since Canada’s corporate executives stand to benefit from this money, while taxpayers pick up the tap, is this any surprise?

Posted by Matthew Johnston

Posted by westernstandard on December 21, 2009 | Permalink


"Since Canada’s corporate executives stand to benefit from this money, while taxpayers pick up the tap, is this any surprise?"

This is definitely no surprise. But I don't think their motives are quite as nefarious as you seem to imply. I'm sure plenty of these executives don't believe in fiscal stimulus but are supporting it because they'll benefit. There are many, however, who genuinely do believe in Keynesian stimulus spending.

Posted by: Charles | 2009-12-21 10:45:11 AM

The litmus test for entry to most corporate board rooms and executive offices is a complete lack of moral resistance to rent seeking. It adds a another dynamic to the notion of competitiveness.
Just another dividend from a mixed economy.

This is why Dr. Milton Friedman elevated businessmen to that of academic in terms of sharing the role of the two largest threats to capitalism.

Posted by: John Chittick | 2009-12-21 10:56:10 AM

Since Canada’s corporate executives stand to benefit from this money, while taxpayers pick up the tap, is this any surprise?
Posted by Matthew Johnston

Nor is it any surprise that "professional" investors stand to benefit.

Posted by: The Stig | 2009-12-21 11:21:03 AM

"Nor is it any surprise that "professional" investors stand to benefit."

Actually, it is unclear whether pension fund and mutual fund managers actually benefit in the long run. Since these types of managers' assets are dependent on savings (which are much lower than they would be under a more "laissez-faire" type economy), it could be argued that they suffer in a Keynesian style economy.

Those who really benefit are speculative managers (these days hedge fund managers). These are the managers who borrow printed money and invest in the markets making huge bonuses and closing up shop when things go to hell in a hand basket.

As to whether Matthew benefits or not, well that depends on quite a number of things ;)

Posted by: Charles | 2009-12-21 12:22:47 PM

And I try not to let personal benefit cloud my thinking.

[Inside voice:] Get leveraged to hard assets and let the stimulus money flow.

Posted by: Matthew Johnston | 2009-12-21 1:47:54 PM

Whatever happened to the slogan of the corporate elite: "Let the marketplace decide" and "Get the government out of business?" Anyway here is a financier thanking the taxpayers.

A Grateful Financier Thanks the Taxpayers
By Stephen J. Gray

Dear Taxpayers,

As I languish by the pool, martini in hand, in my favorite offshore tax haven, I want to give you the ordinary people, the backbone of society, some recognition. You taxpayers are paying to keep our free market system afloat and the financial industry in business. Your hard earned tax dollars were there for us in the financial system when we needed them most, and for that we are eternally grateful. I know many of you have lost your jobs and your pension funds are in the dumpster. Some of you have lost your homes and are in debt to the banks. Still you soldier on amidst all these negatives. But do not worry, be happy, the day of recovery is coming soon, and once again it will be back to business as usual in the market.

The market as you all know had a bad and troubling experience. We were all selling loads of useless paper throughout the financial system. Some beneficiaries of our selling expertise were; your pension funds, state governments and everybody and anybody we could suck in. We were selling this crap, oops, I mean collaterized debt opportunities like there was no tomorrow. But, unfortunately tomorrow arrived and you the taxpayers are picking up the bill for our free market fraud, pardon me, I mean errors. Mistakes were made and some of us, the greedy ones, were left holding this useless lousy paper that we were selling. Now it is being called “toxic paper,” though some of our marketing experts are calling it “troubled assets,” in the hope that it can be sold at a later date when the market recovers. And make no mistake the market will recover as long as there are politicians out there to bail out, oops, I mean stimulate the system, with your tax dollars.

Dollars are important in the financial system, and your tax dollars have been a boon to us. A press of a button and we can move money offshore to our tax free haven. As I sit here, and write this, I think of all you wonderful people who are giving up so much to keep us in the style we are accustomed. Without your help, we might all be broke, just like some of you. But hey, you came through for us and I am sure you will again, when the time comes, as it will, and the market once again plunges after we take our profits.

Profits are good and a blessing to us all. That old saying: “profit from your mistakes,” comes to mind. A good example is some of the bankers who made “mistakes” selling the “toxic paper,” I mean, “troubled assets,” now they are profiting from the bailouts, pardon me, I mean stimulus packages of your tax dollars. Big bonuses are being handed out by them, courtesy of your tax monies that helped them stay in business. So we are all raising a glass in your honor and toasting our successes.

Success is important to us all, and I include you the taxpayers. Without successful bailouts, I mean stimulus packages of your tax dollars, we moneychangers would be devastated. Now we are all stimulated and watered and fed by your generosity. So thank you for all you have done for us. Keep smiling, keep faith in the market, think positive and know that we financiers depend upon you for our bread and butter. I will close by quoting one of our esteemed banker friends, who said just the other day that: “We are doing God’s work,” though I am sure that some cynical people will say the false God Mammon is more appropriate. Anyway, thank you all for your assistance in keeping the “free market” functioning and I hope to see some of you at my next investment seminar.

Mr. B.S. Baloney c/o Cayman Islands

Stephen J. Gray
November 11, 2009.

Posted by: Stephen J. Gray | 2009-12-21 2:34:34 PM

Some business people are so busy running their businesses they have been sucked in by partisan Conservatives. Eventually they will wake up, they are not so stupid as to agree with Harper.

Posted by: VMS | 2009-12-22 6:21:03 AM

Since all wealth comes from productive activity and massive stimulus has been disbursed at the expense of enslaving future generations with zero regard to real market forces or actual need (apart from political optics), this is just redistribution from the productive to the greedy.

Mathematics of Rule proves what happens (economic collapse) when resources are diverted from productive to unproductive activities (the main recommendation of false Keynesian economics):


Current social / economic events are just another face of mankind's eternal war between the productive (those who produce more than they consume) and the greedy (those who consume more than they produce), the root cause of the rise (predators successfully dealt with) and fall (predators in control) of civilizations.

Our far wiser ancestors once stopped this madness and placed the civilized in control with the "rule of law", now rationalized away, along with civilization:


Even though it was known at the outset that stimulus would fail and be counter-productive, it was done anyway. This is because our "masters" know damn well that civilization is past the tipping point and is going down. Stimulus was just another "smash and grab" by elites in their ongoing saga of "grand theft, civilization".

Posted by: Bill Ross | 2009-12-25 1:02:42 PM

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