A longtime resident of Uxbridge, Ted Barris has written professionally for 40 years - for radio, television, magazines and newspapers. The "Barris Beat" column began in the 1950s when his father Alex wrote for the Globe and Mail. Ted continues the tradition of offering a positive view of his community. He has written 16 non-fiction books of Canadian history and teaches journalism at Centennial College in Toronto.
All about you are losing their heads...
Here we go again. The past few days all I've been hearing is doom and gloom about the economy. Everywhere I look and listen - in the papers and on radio and TV mostly - I see and hear people running around shouting the modern equivalent of Chicken Little's “The sky is falling. The sky is falling!” Only the 2011 version is: “My stocks are falling! My stocks are falling!”
And what does it all mean? If you're reading the same online and printed material I am, the Toronto and New York stock exchanges have all dropped between 400 and 600 points in the past few trading days. Business journals say that upwards of $2 trillion has been lost on stock markets around the world since last Friday. They're saying that it's the fifth or sixth worst point drop in stock market history. I have to admit that I get a bit dizzy with all these numbers and frankly don't understand what half of them mean.
And why is this happening? Some of it has to do with unpaid debt among European Union nations - Greece, Spain, Italy, etc. As well, if you read the right-of-centre media, they're blaming President Barak Obama's budget and fiscal policies. If you read the left-of-centre media, they're blaming the Republican and Tea Party members' intransigence to allow the U.S. government to raise its debt ceiling to pay its bills. In both cases that's political brinkmanship plain and simple.
More dollars and cents, however, was Standard and Poor's recent pronouncement; last Friday, the U.S.-based financial research and analysis firm downgraded the U.S. credit rating from triple-A to double-A-plus. That sparked investor selling, precious metal prices soaring, and every finger-pointing pundit and politician ranting.
Well, I don't travel in those circles. I watch and try to interpret, the same as you. I do have a few naïve thoughts - based on anecdotes - to pass along. I can appreciate that some investors, who rely on stocks for hand-to-mouth survival, might want to bail out, salvage what cash they can. But I think the response among members of our own family during the last recession in 2008 is instructive. At the time, our younger daughter and son-in-law were considering moving from a rental to condo ownership. Several of us suggested they consider buying a house instead. They resisted temporarily, but with real estate prices slumping, buying a house (rather than hoarding what cash they had) seemed a reasonable option. They bought within their means and haven't regretted it. They went into the marketplace, not out of it.
I've noticed too that the finance minister has trotted out some of his favourite rhetoric over the last few days. As he's done on several occasions (including just before the 2008 recession which neither he nor his peers saw coming), Jim Flaherty has allowed as much as to say, “We will get buffeted by what happens elsewhere.”
But he's also wont to say Canada's banking institutions are the soundest in the world. He rarely adds, however, they're sound because previous Liberal administrations in Ottawa resisted pressure from financial institutions (and a Conservative Opposition) to allow the big five banks to amalgamate in the 1990s. Instead, he often recommends EU countries copy our system.
Finally, as another antidote to stampeding off a cliff in total despair over all this economic sturm und drang, I offer an anecdote courtesy of our other son-in-law and grandson. A few days ago, while cleaning our basement, my wife and I came across our older daughter's handmade piggy bank; actually it's a wooden triceratops with a see-through plastic body where coins were deposited; she made it while attending Joseph Gould Public School back in the 1980s. At any rate, we returned it and our son-in-law cleaned it up to pass on to their son. Nearly two-years-old, Sawyer is thrilled with the mechanics of things and seeing his dad put coins in the dino-bank, Sawyer wanted to try it himself.
“Dook Mommy,” he shouted (he's still working on the “L” sound), as he began depositing his father's dimes, nickels and pennies into the bank.
Our son-in-law told us later that the whole episode reminded him of words of wisdom from his great aunt (by marriage), my Aunt Virginia. One of those wonderfully giving relatives, who'd survived the Depression and the Second World War on the home front by saving and making do, Aunt Virginia had words of advice about saving and wealth. Among other things, she always recommended picking up that lost penny on the sidewalk.
“Whenever I see a penny lying on the ground,” our son-in-law said, “I always think of Aunt Virginia … Now, whenever I see Sawyer fill up his dino-bank, [we] will think of her.”
Perhaps Aunt Virginia's broader message - in all this economic turmoil - is take care of the pennies and the dollars will take care of themselves.
