Posts Tagged ‘economy’

Continuing to buck past notions of being a highly protectionist country, as of 2011, Canada has one of the lowest average tariff rates in the world.

The conservative Heritage Foundation ranked Canada as having the 9th lowest average tariff rate out of 183 countries, at 1%. Its southern neighbour, the United States, was ranked in 44th place, with an 80% higher tariff rate, and just slightly lower than Mexico’s, in 45th place.

Other notable countries are Hong Kong, Libya, Macau, Singapore and Switzerland, with a 0% average tariff rate.

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We talk differently here!

Former director of the Office of Management and Budget, Peter Orszag, told us what the word “immediately” means in Washington speak, in his September 14, 2010 interview with Charlie Rose:

PETER ORSZAG: …There’s also a trade off analytically — put the politics aside — analytically to the size of the recovery act because the amount of money you can get out the door quickly that will boost the economy immediately is quite limited, maybe $200, $300, $400 billion.”

CHARLIE ROSE: Immediately means?

PETER ORSZAG: You know, within a year.

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Courtesy of lectures by “Crash! Are You Ready?” with host George Whitehurst-Berry:

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On February 15, 2009, President Obama’s special advisor, David Axelrod, stated on Meet the Press with David Gregory: “this is the worst economic downturn we’ve had since World War II.

So why is anyone surprised that on November 6, 2009, the Bureau of Labor Statistics reported that the U.S. unemployment rate had reached 10.2%?

Since World War II, the unemployment rate had previously already hit double-digits. Specifically, as late as 1983. The unemployment rate is a key metric of the economy, so why would anyone expect it to not go into double-digits during this recession?

When asked about whether the recently passed stimulus package would prevent the unemployment rate from reaching double-digits, Axelrod responded:

Well, that’s our hope. That’s our hope. There’s no doubt that without it that’s what–that’s where we were looking, double-digit unemployment. And that’s what we’re trying to forestall. We want to turn this thing around, and we think that this will, will happen.

Notice that he only talked about hope, and no promises. If a politician doesn’t even bother to make a promise about something happening that they want to happen, you can be pretty certain it won’t happen.

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On January 27, 1996, President Bill Clinton stated during his 1996 State of the Union Address, “The era of big government is over.”
The federal budget numbers are from the 1996 and 2009 budgets.

THEN: No government bailouts
NOW: Bailouts could reach $23.7 trillion

THEN: Total federal spending was $1.61 trillion
NOW: $3.1 trillion

THEN: Government was already big.
NOW: The PATRIOT Act, Department of Homeland Security, two unconstitutional wars, federalization of the National Guard, warrantless wiretaps, 30+ “Czars.”

THEN: Defense spending was $262.2 billion
NOW: $651.1 billion

THEN: The federal debt was $5.27 trillion
NOW: $10.41 trillion

THEN: “Our economy is the healthiest it has been in three decades.”
NOW: The economy is the worst it’s been in six decades.

THEN: “We have the lowest combined rates of unemployment and inflation in 27 years.”
NOW: The highest rate of unemployment in 26 years.

THEN: “America is selling more cars than Japan for the first time since the 1970s.”
NOW:  GM and Chrysler went bankrupt, Toyota overtook GM as the world’s largest car producer in 2008 for the first time ever.

THEN: “And for three years in a row, we have had a record number of new businesses started in our country.”
NOW: The highest number of bankruptcies in the past four years since the 2005 bankruptcy overhaul.

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From Google Finance at http://finance.google.com we obtain the following market capitalization numbers for the “Big Five” Canadian banks and the five biggest U.S. banks in terms of market capitalization from their closing numbers on the New York Stock Exchange on Friday, February 20, 2009: (B represents billions of U.S. dollars)

“Big Five” Canadian banks:
1) Royal Bank of Canada (RY) 29.04B
2) Toronto-Dominion Bank (TD) $21.57B
3) The Bank of Nova Scotia (BNS) $19.84B
4) Canadian Imperial Bank of Commerce (CM) $12.18B
5) Bank of Montreal (BMO) $10.77B
total = $93.40B

Five biggest U.S. banks:
1) JPMorgan Chase & Co. (JPM) $74.28B
2) Wells Fargo & Company (WFC) $46.13B
3) Goldman Sachs Group, Inc. (GS) $39.06B
4) Bank of America Corporation (BAC) $24.23B
5) Citigroup Inc. (C) $10.63B
total = $194.33B

From the above information, we see that Canada’s largest bank by market cap would be fourth-largest in the U.S., and that the five largest U.S. banks are collectively only worth two times that of the five largest Canadian banks.

According to the latest edition of The World Fact Book at https://www.cia.gov/library/publications/the-world-factbook/index.html, the nominal GDP of the U.S. was estimated to be $14.33 trillion in 2008, whereas Canada’s was estimated to be $1.564 trillion.
By this measure, the U.S. economy is 9.16 times bigger than the Canadian economy, yet the five largest U.S. banks are now collectively only 2 times bigger than the five largest Canadian banks.

These numbers should be setting off alarm bells in your mind as to the severity of the current U.S. banking crisis, if the bankruptcy of Lehman Brothers, collapse and subsequent acquisitions of Bear Stearns and Merrill Lynch haven’t already.

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