28
Dec 18

Short men don’t slouch.

Every single height-challenged male carries himself as erect as he is able, straining to exert every last millimeter of vertical presence.  It’s a verifiable truth - just look around.

Short guys always yearn to be bigger.  Consider, as very public example, North Korean leader Kim Jong-Un.  By adding five inches to his pint-sized frame with platform shoes and another five inches by combing his hair straight up he stretches at full extension to five feet and seven inches of dictatorial pomposity.

And while most don’t go to the “lengths” of Kim Jong-Un to increase their physical presence, some diminutive males attempt to compensate for their size via out-sized impacts of a different sort.  Take, for instance, Ross “I’m all ears” Perot, dollars-per-inch the richest human alive.  Not content with proving his “big-ness” with massive financial success, the five-foot five-inch American took a bold run in 1992 at becoming President of the United States.  He fell, ahem, short, but took enough support from George H.W. Bush to hand Bill Clinton the presidency with only 43% of the vote.  (It’s a lesson that Canada’s Maxime Bernier, of commendable physical span but alarmingly short on political sense, seems determined to re-learn.)

It’s understandable, then, that diminutive males would be drawn as flies by honey to Michael Lewis’ excellent 2010 bestseller, “The Big Short”.  It’s possible that the entire first run was sold to small men intoxicated by the promise of its title. 

Alas, his book isn’t a recipe for elongating Tom Thumb, but rather tells the sordid tale of the U.S. subprime mortgage crisis of 2007-2008.  It chronicles the short-sellers who bet (against all prevailing wisdom) that the giant American housing bubble was going to burst - people like the founders of Cornwall Capital who created a hedge fund in their garage with $110,000 that blossomed furiously into $120 million when that bubble went "pop".  It took guts to make that bet and, more importantly, to stick to it – particularly when all the top credit-rating agencies had adopted as their guiding mantra “Let The Good Times Roll”. 

By 2007 Moody's, Standard & Poor's, and Fitch had granted triple-A ratings to three trillion dollars of loans made to home-buyers with bad credit and undocumented incomes.  By 2010 hundreds of billions of dollars' worth of these platinum-rated securities had plummeted to "junk" status.  The write-downs and losses wiped out three major investment banks (Bear Stearns, Lehman Brothers, and Merrill Lynch) and visited financial ruination and misery upon millions upon millions of American homeowners, and by contagion,  individual investors all over the globe.

It’s a fascinating, heart-wrenching, cautionary tale - and recent enough that we haven’t even begun to erase the trauma of those events from our memory banks.  

At least, most of us haven’t.  Count Canadian Prime Minister Justin Trudeau as a notable exception.  Witness his recent year-end interview with Evan Solomon.  This is the PM, remember, who sunnily declared that “budgets balance themselves”, the PM who promised during his 2015 election campaign that the budget would be balanced by 2019, the PM whose Finance Department now admits that the federal budget won’t be balanced until 2040 (!).

Solomon: “The concern is what happens when we hit a recession. If you're running $19-billion deficits now, your fiscal capacity to deal with a rainy day has got to be worse.”

Trudeau:Actually, that's not true. And for two reasons. First of all, the ratings agencies have given us that “AAA” because they are confident in our ability to withstand shocks in the future if they come. Secondly, when Canadians have better jobs, when they have more education, when we have solid infrastructure or more housing, Canadians do better. Even if there are difficult times in the economy. That's the choice we made to invest in our communities, to invest in our future. And that's what's giving Canadians confidence.”

That’s right.  Utterly oblivious to recent history, our spendthrift leader and his minions are busily and recklessly over-leveraging the Canadian economy and taking as validation the sage appraisal of the very same ratings agencies that failed to catch even a sniff of the enormous financial catastrophe that lay ahead for Americans and the world a decade ago. 

One might wonder what version of reality this prime minister inhabits.  But the answer to that question seems obvious, given that his government’s signature accomplishment has been the legalization of pot:  he’s not short of cannabis. 

Leave a Reply