Better than what?
Canadian banks were a constrained bunch of animals which, had they gotten past the finance minister known as Paul Martin, would have created three Canadian mega-banks and would have failed as spectacularly as any of the fallen in the US they lusted to become.
Banking and government sources both say Martin did his utmost to be diplomatic. He did not want to appear to have made up his mind, given that the federal competition bureau would not deliver its report on the mergers for almost two weeks, but he also wanted to prepare the banker for bad news. Like everything else arising from this year’s ill-fated bank mergers, however, this meeting between two of the most powerful figures in Canadian finance went off the rails fairly fast. For weeks, Cleghorn’s fuse had been growing shorter as his frustration mounted over Canadians’ inability to understand the bankers’ point of view. In response to Martin’s evasiveness, something apparently snapped. Cleghorn asked straight out whether the Royal’s merger with the Bank of Montreal, and the Toronto Dominion Bank’s copycat arrangement with the Canadian Imperial Bank of Commerce, were going to be allowed to proceed. "No," Martin said simply. Cleghorn, according to both banking and federal government sources, said something along the lines of "No, but . . . ?" or "Unless what?" Martin repeated his first answer. "No."Oh, and didn't the banks make it obvious how goddamned furious they were.
In one swoop, the finance minister made it clear that government, not business, will decide what shape the country’s banking sector is allowed to take in the years ahead.
But, what Martin had done was to ensure that a single bank failure would not be enough to lay waste to the Canadian economy. The Milton Friedman formula had no place in Canada. Martin was certain that one day, perhaps after he was gone, Canadians would thank him for his stand.
Then came Harper.
Harper handed the reins over to the banks. Luckily he was constrained. There wasn't enough time for the banks to rebuild their old merger deals and Harper, with a minority government, didn't have a lengthy enough forecast lifespan to guarantee the banks enough time to root themselves in a three bank national model. In short, the actuarial tables on Harper's government didn't give the banks enough insurance to prevent a future government from turning any ideas they had back to their former state.
It's a sure bet that had Harper won a majority in his first tenuous arrival in government, Canadians would have been screwed nine ways to Sunday and the effect of the toxic dealings of banks around the world in general would have affected Canada ten times worse than it did.
And then, the meltdown of the century. Banks around the world had been ripped off by the greedy behaviour of those larger than them. That trickled down, credit was cut off and people everywhere started losing their jobs.
Now we are pelted with a constant harangue of Harper telling everyone, including the world, that he commands the world's most stable banking system, and that the Canadian government never bailed out Canadian banks.
Harper and his sock puppets are blatant liars.
Canada did bail out its banks. The difference between the way Canada did it and the methods of any other capitalist democracy is that Canada did it "off book". In other words, it was never a federal budget item. Instead, the charge went against certain Crown Corporations as liabilities.
Sneaky? Yup. Dishonest? Absolutely.
Read this for more.
And you get down on bended knee and thank Paul Martin for saving this country from a certain and long-lasting deep depression.
Bonus! Reginald Stackhouse is having similar thoughts. Looking back at the failure in the mid-1980s of the Northland bank and the Canadian Commercial Bank he makes this point:
... another example of corporations being capitalistic on their way up, but socialistic on their way down. If they could be smug about individual responsibility in good times, they were not too proud to become welfare cases in hard times.