If there is any one thing to make this writer cringe, it is the media’s attention getting quotes from banks and investment firms and in particular; economists.  I once worked in a firm where the VP was looking for someone in the finance department.  He offhandedly commented that the next MBA to walk through the door would be ushered out just as quickly.  It says a lot.

I don’t dislike MBA’s, I think every company should have one as a token.  The rest should get a grip on the real world away from the ivory towers.  I say this because their views are so narrow and biased toward their employers as to be moot. 

In one day I saw an economist from one of the major banks make a particular comment about the Canadian dollar and in the next story on the same broadcast, an economist from a competing bank state exactly the opposite.  Who do you believe?  The answer is obvious; neither.

They couldn’t say anything with any certainty.  They couldn’t say that things are great or not so good in Canada; or are they?  Well if you are in the Oil Patch it is wonderful.  If you are in Ontario, Quebec or the Maritimes you would quickly take the opposite approach.  However if you happen to be in a service industry in Calgary your opinion would probably rival that of the east.  One thing is for sure, the powerhouse economy of Ontario is in deep trouble and the rest of Canada should be concerned; unfortunately Ottawa doesn’t see it that way; yet.

The problems with financial reporting are highlighted by region and often by economic sector.  The economists at the banks are looking at a much wider scope and this is one the government often likes to use.  Simply, the booming oil patch is skewing the Canada wide numbers.  The people in the east have been screaming about this for a couple of years and in some cases decades and it has fallen on deaf ears in Ottawa.

This has led to a unique situation that has recently been underscored by the meeting of Jean Charest and Dalton McGuinty.  Both are Liberals but both have had issues with the Federal Liberals as well as each other’s provinces and now the Federal Conservatives.  Both have made it abundantly clear their parties are provincial and not federal.  Good for them.  Now we can throw Danny Williams from Newfoundland-Labrador into the mix and what we are seeing is that the provinces are telling Ottawa that they are failing in their responsibilities to Canada.  If the feds can't do it they will.  BC and NFLD - LAB have already led the way.  This kind of banding together isn't new, it has been done before but for different reasons.  Now the provinces are moving on addressing issues the federal government refuses to attack; environment being just one.  So how does this relate to economists?  Simple.

Economists are number crunchers.  The problem is that they are crunching the wrong numbers.  Instead of looking at commodities trading, stock markets and currency exchange they should put on their walking shoes and roam the streets for a while   Here is what they will see.

They will see idle factories.  Not one or two but an alarming number of them.  They will see idle lumber mills.  They will see fishing fleets tied up.  They will see trucks sitting in yards.  They will see food banks being used with increasing frequency.  They will see houses for sale in order to avoid bankruptcy.  They will see families buying hamburger instead of pork chops.  They will see people putting more money into the tank of their car than on the table for food; just so they can get to work because there is no public transit.  I could go on and on but I think the point is made; they are living in a fantasy land.

Why don’t they see it?  Well let’s start with obscene salaries, a Beemer for mom to go shopping and ballet classes for the kids.  A million dollar home and a cottage with all the amenities.  Why would they want to see the seedier side of life?  Life is good; for them.  Of course their employers need to make sure that they are seeing “The Big Picture”; the one that makes the bank money and that is its institutional investors.  The method of getting the message out?  Media all too willing to quote an “economist”.  The reporters too lazy to dig for accurate data assuming that what they are being told is true.

For the general population this may be of passing interest but survival is a point of focus; something the economists are missing.

Unfortunately, Canadians are paying the price for this sort of negligence by government, business and media.

Harold Hotham

www.comparevillage.ca

harold.hotham@comparevillage.ca