For years, I thought Mike Duffy, the infamous, national CTV newscaster from Prince Edward Island was a passive (small “l”) liberal. On Thursday, he re-positioned himself as a biased, anti-French, anti-Dion news-commentator.

Here’s the situation. ATV (an affiliate of CTV) newscaster, Steve Murphy asked Stéphane Dion this week (in a pre-taped interview in Halifax)

“If you were Prime Minister today, what would you have done that would be different from Stephen Harper in respect to your reaction to the current U.S. and global financial crisis”.

Dion started to reply and then asked for clarification of timing in respect to the question. Murphy repeated the question and Dion rightly asked if he was asking the question in context of having been Prime Minister for the last two years or in the context of being Prime Minister in the future.

Tapes were stopped and the question was asked a third time without clarification or modification in respect to timing. Mr. Dion responded in terms of what he will do when he becomes Prime Minister, not in terms in what he might have done if he had been Prime Minister for the last few years.

CTV reporters and Conservative commentators pounced on Dion’s language skills and attributed them to “hearing impairments”, the implication being that he has a disability that makes him unfit to be Prime Minister i.e. his English language comprehension (in terms of tense) is less than their own.

Their message was that if Dion couldn’t understand the question, he’s not healthy enough to be Prime Minister. That’s BS. The question was both hypothetical and without context. It should have been “If you had been Prime Minister for the last few years, how would you have responded to the financial meltdown in the United States?” or “If you were elected Prime Minister today, how would you respond to the economic crisis”.

There is another issue and that relates to integrity. When an individual tapes an interview, there is an assumption that mistakes, interruptions or retakes remain in the studio. That did not happen. CTV broadcast and re-broadcast the re-takes and the questions for clarification.

Who in their right mind will ever trust a CTV taped interview again?

Learning of the situation, Prime Minister Harper immediately characterized Dion’s television stumble as proof that his pollution tax will destroy the Country. How stupid and how revealing of Mr. Harper’s vacuous attempt at policy formulation and leadership!

My guess is (without benefit of today’s polls) that the Conservative response to CTV’s violation of privacy and its attempt to paint Dion as English-language deficient will create significant reaction in Quebec and may indeed result in the wipe-out of Conservatives in that province.

All of this is set against a backdrop painted by Finance Minister Jim Flaherty who continues to insist that Canada is in good financial shape, even as the Bank of Canada announced it was making an extra $12 billion available to ensure credit does not dry up in the Canadian economy.
Flaherty says problems in the U.S. clearly need fixing but he argues that "the situation in Canada is quite different."

He says “the U.S. government is running deficits while Canada has surpluses".

Hold on Mr. Flaherty, did you know that Canadian housing prices have begun to drop?

Did you know that the value of our stock market investments (including mutual funds and pension plan savings) have diminished in value by upwards of 25% in just a few weeks?

Did you know that 75% of Canada’s exports go to the United States?

Did you know that most of our lumber and fish exports go to the United States? If the Americans feel pain, we will feel pain. Indeed, we could find ourselves in the emergency room, perhaps on the operating table.

Speaking to reporters on Parliament Hill in Ottawa on Thursday morning, Flaherty finally acknowledged that the "unprecedented" economic turmoil is "getting worse". He sought to reassure Canadians that the government understands their growing fears and that their financial system is "well-positioned" to weather the global turmoil.

The statement was a far cry from last week's leaders' debates, in which Harper refused to acknowledge that Canadians were worried about their job security and their homes, instead saying Canadians were focused on problems in the stock market.

The Conservative Party of Canada, a rag-tag collection of Progressive Conservatives and right-wing Reformers have spent the last few weeks attacking the character of Stéphane Dion.

On Friday, they joined with CTV in harpooning the Opposition Leader on his language skills, not his policy offerings. On Friday, the Toronto Globe & Mail endorsed the Conservatives as their choice for the future.

God help us if voters listen to them.

W.E. (Bill) Belliveau is a Shediac resident and Moncton business consultant. He can be contacted at bill.bellstrategic@nb.aibn.com Atlantic Insight is a published Blog inventory of opinion articles published weekly in New Brunswick's print media as written by W.E. (Bill) Belliveau, who is a resident of Shediac, New Brunswick, and small business owner, operating his Moncton-based marketing consultancy, Bell Strategic. He can be reached by e-mail at mailto:bill.bellstrategic@nb.aibn.com

On Tuesday, I watched a CBC political game show where representatives from
each party (including Liberal Scott Bryson and Conservatives Finance Minister Jim Flaherty) took questions from a live audience in a Toronto television studio.

The audience was pre-selected according to voting intention and weighted to early week poll results i.e. 36% Conservative, 26% Liberal, 17% NDP and 9% Green. Six subjects. were addressed by way of questions from the audience. Each candidate replied to the questions and then debated the subject matter with the other candidates. The audience was equipped with individual electronic voting devices and voted after each subject was discussed. Liberal Scott Brison won five of the six debates.

Most significantly, when they voted at the end of the show, the audience’s voting intentions had flipped. The Liberals went from 26% to 52%. Conservatives went from 36% to 29%. The NDP dropped to 16% and the Green went from 9% to 3%.

A similar thing happened after the Wednesday night’s “Leader” debate in French. According to an Ipsos Reid poll, Liberal Leader Stéphane Dion emerged as the clear winner of the debate with 40% of voters who viewed it saying he won, compared with 24% who felt that Bloc Leader Gilles Duceppe had won. Only 16% felt that Conservative Prime Minister Stephen Harper emerged victorious.

In the English language debate Conservative Leader Stephen Harper emerged as the winner with 31% of Canadian voters who responded to the survey but ironically, the only party leader to have overall impressions worsen was Stephen Harper (a net loss of ten points), despite the fact that more viewers thought he won the debate. The English language survey had an estimated margin of error of +/- 2.0 percentage points, 19 times out of 20 had the entire English-speaking adult population in Canada been polled.

Based on these results, it appears that language is playing a big part in leader preference. Most significantly, the French results suggest that Harper could lose votes and seats in Quebec, thus denying him a majority. The flip side is that he might be able to win a majority in English Canada with as little as a third of the vote because his opposition is splintered among the four other parties. The idea that 33% of voters could elect a majority government in Canada is a frightening prospect, particularly as a crashing American economy lurks in the background.

Prime Minister Harper continues to deny that the U.S. situation will affect Canada because our “fundamentals are sound”. That is poppycock. Anything that affects the American economy in a negative way will ultimately affect Canada.

In the English debate, Harper brushed aside repeated criticism that he's failed to produce an economic plan. Throughout the two-hour session, the Conservative leader was quizzed on how he proposes to address Canada's financial situation in light of the U.S. crisis.

It was at Harper's request, that the amount of time devoted to the economy was increased to 30 minutes in both the English and French debates. Green Party Leader Elizabeth May questioned why Harper would request more time to debate the economy and then fail to make use of it.

"Both nights, I waited to hear what you thought you should do about the situation but you spent your time attacking the policies of others," she said.

NDP Leader Jack Layton agreed. "Where's the platform, under the sweater?" he asked Harper, making fun of the Conservative leader's new wardrobe of sweaters being used in his party's ad campaign to soften his image.

Instead of responding to the accusations, Harper attacked Stéphane Dion, accusing the Liberal leader of panicking under pressure by unveiling an economic plan during the Wednesday’s debate. That’s the Harper way – attack your opponent rather than debate the issues.

South of the border, the two U.S. vice presidential candidates Sarah Palin and Joe Biden squared off in debate opposite our leaders. Republican vice-presidential nominee Sarah Palin has been mocked for her inexperience and shortage of credentials. She’s been under fire for not being accessible to the media and for delivering tightly scripted speeches.

In Thursday’s debate, according to a CNN/Opinion Research Poll of debate watchers, the Alaska governor exceeded expectations as 84 percent of the debate watchers said she did better than expected. However 57 percent chose Joe Biden as the winner in their debate while only 36 percent gave the nod to Palin.

By the end of the week, nothing much had changed. Obama and Biden lead in the United States and Harper continues to lead in Canada albeit with a lower percentage of the popular vote. The U.S. financial situation may change all of that next week. It should be interesting.

W.E. (Bill) Belliveau is a Shediac resident and Moncton business consultant. He can be contacted at bill.bellstrategic@nb.aibn.com Atlantic Insight is a published Blog inventory of opinion articles published weekly in New Brunswick's print media as written by W.E. (Bill) Belliveau, who is a resident of Shediac, New Brunswick, and small business owner, operating his Moncton-based marketing consultancy, Bell Strategic. He can be reached by e-mail at mailto:bill.bellstrategic@nb.aibn.com

The U.S. government is on the verge of making an unprecedented financial commitment to bail out its financial industry. Cost could be as much as a trillion dollars although the initial asking price is $700 billion, almost double the country’s current operating deficit.

The money would be used to buy and stabilize the bad securities held by large U.S. financial institutions and some foreign institutions including Canada’s Royal Bank.

After the stock-market crash of 1929, the American people decided to tightly regulate their financial system so that it could never again threaten the U.S. economy. Depression-era regulations worked effectively until the late 1970s, when the election of Ronald Reagan led to a radical process of deregulation.

Deregulation, in concert with rapid financial innovation created a volatile pattern of financial booms and crises. Crisis led to bailouts by affected governments. Bailouts encouraged financial firms to expand further and take greater risks. In good times, there were massive profits. In bad times, the public paid to limit their losses.

In the United States, the share of total corporate profits generated in the financial sector grew from 10% in the early 1980s, to 40% by 2006. As financial markets grew larger and economies became more vulnerable, the pressure on governments to bail them out increased proportionately.

The most recent housing boom was driven by a rapid rise in home prices in the years leading up to 2006. Home buyers and mortgage lenders assumed housing prices would continue to rise and sustain the boom. U.S. banks and mortgage brokers earned large fees to create mortgages.
Many, if not most of these mortgages were subsequently sold to investment-bankers who also received fees to package them into mortgage-backed securities that were then sold to mainline banks, hedge funds, pension funds and insurance companies around the world.

It made economic sense for the investment-banks and their brokers to promote the flow of mortgages, even if that meant selling mortgages that were likely to default if home prices stopped rising or interest rates rose substantially - it’s called greed.

These mortgage-backed securities were essentially highly leveraged; risky bets on the false assumption that housing prices would continue to rise ad infinitum. The security offerings were so complicated that no one knew their real value or what their price should be. They only had a market because credit-rating agencies such as Moody's gave them AAA ratings.

So what does all of this have to do with Canada? Well, to begin with, we all know that anything bad that affects the United States will ultimately affect Canada. Prime Minister Harper and Finance Minister Flaherty tell us there is no chance Canada will tumble into the same kind of financial mess as the United States, yet Merrill Lynch Canada suggested on Wednesday that Canada is well on the way to a U.S.-style housing crisis.

Coincidently, the Bank of Canada quietly conceded this week that the U.S. trauma is filtering north of the border by making $4 billion in cash available to Canada’s chartered banks at “relaxed terms”.

“After several decades of double-digit growth, Canadian housing prices are falling and inventories of unsold houses are rising sharply” according to a report by TD economists David Wolf and Carolyn Kwan. “The tipping point will come when owners start walking away from their homes because they owe more than the value of their properties”.

Is the United States about to revisit the ‘Dirty Thirties’ and take the rest of us along for the ride? Probably not, say economists at the TD Bank arguing that the Federal Reserve Board (U.S. central bank) is avoiding the mistakes it made before the big crash of 1929 and during the long economic darkness that followed.

TD economists argue that the current mess is more like the U.S. savings and loan (S&L) crisis of the 1980s, only worse. "During the S&L crisis, the government established a Resolution Trust Corporation (RTC) at just over $400 billion. The purpose was to purchase the bad debts of financial institutions and over time sell them back into the market as financial conditions improved. The RTC was able to sell over 95 per cent of the assets they had initially seized with a recovery rate of over 85 per cent.

That said, the TD does predict a mild recession next year with little economic growth in Canada or the United States as a consequence of U.S. problems. That seems a little optimistic in light of the current U.S. operating deficit, the rising cost of its wars in Iraq and Afghanistan and the potential cost of bailing the financial industry.

In my opinion, Canadians need to be concerned about this fiasco because somehow, somewhere, sometime, we are going to be forced to share the burden.

W.E. (Bill) Belliveau is a Shediac resident and Moncton business consultant. He can be contacted at bill.bellstrategic@nb.aibn.com Atlantic Insight is a published Blog inventory of opinion articles published weekly in New Brunswick's print media as written by W.E. (Bill) Belliveau, who is a resident of Shediac, New Brunswick, and small business owner, operating his Moncton-based marketing consultancy, Bell Strategic. He can be reached by e-mail at mailto:bill.bellstrategic@nb.aibn.com