Surviving the worst

By Marcel Côté

George W. Bush will probably go down in history as one of the worst US presidents ever. American historians, who love making such types of judgments, have already ranked Bush in the bottom quarter, alongside former presidents Ulysses S. Grant, Warren Harding and Andrew Johnson.

Nothing to brag about
The highlights of Bush’s term of office include:

1. The global financial crisis, ignited under his presidency, with its lax regulatory attitudes that resulted in enormous abuses and led to the largest crisis since 1929. Just as amazing is his complete absence of leadership in trying to develop solutions to the crisis.
2. The war in Iraq, which brought about a change in political regime but at the expense of hundreds of thousands of victims. What’s more, the war will eventually cost the US Treasury billions of dollars — at least double the cost of the Vietnam War
3. An ongoing war in Afghanistan, also with a death toll in the hundreds of thousands, which could end up costing as much as the Vietnam War.
4. A catastrophic tax policy accompanied by a 70% increase in the national debt, now hovering at US$32,000 per person, despite stagnant average family income in the past eight years and a surge in the poverty rate.
5. A major crisis in the US housing sector, with about one homeowner out of six “underwater” with his or her mortgage, due to the crash in home value.
6. An irresponsible environmental policy, which has, among other things, encouraged the production of gas-guzzling vehicles.
7. A significant decline in the credibility of the US the world over due to an arrogant foreign policy characterized by indifference to the positions of other countries.
8. Hurricane Katrina.

The worst in all this is that Bush doesn’t seem to have noticed that anything is amiss. He will finish his second term in a few weeks exactly as he started his first — with a smile on his face and bubbling with optimism.

What has been happening in Canada all this time?
Canada has obviously been affected by this combination of mediocrity and mistakes. The crisis on Wall Street had an impact on our financial sector. In fact, the Bank of Canada has pursued the same laissez-faire policy as the US Fed.

The bursting of the US housing bubble, which caused a 50% decrease in housing starts, was a huge blow to the forestry industry. Our automobile manufacturing plants in Ontario are in full crisis mode because the big cars they were assembling are no longer popular with the public. We accompanied the Americans into the Afghan disaster. And Canadian engineer Maher Arar ended up in a Syrian prison.

There were also a few setbacks in our relations with the US. It’s now harder to cross the border. And NAFTA’s arbitration mechanisms lost much of their credibility, in large part because of chronic objections from the US to our forestry policies.

Are we immune?
Despite all this, our economy has been doing well in the past eight years and has not been overly affected by the blunders of our neighbour to the south. Sure, we are affected by the current downturn, as are all industrialized countries. But Canada’s GDP has grown at a rate of approximately 3% these past eight years — better than in most G7 countries and much better than in the US. Our unemployment rate is lower than the US rate despite the fact that our social policies for the unemployed are much more generous. Finally, our housing sector remains healthy.

Marcel Côté is founding partner at SECOR Consulting in Montreal