Strange, it's in our hands

Its official, Canada as strong as it has been, is following the USA into a recession. But how deep we fall, is oddly in the average persons hands. I am not suggesting that all we need to do is close our eyes, click our heels and recite, “There’s no place like home,” but history has a way of repeating itself if we do not take heed.

Over the past four weeks, Canadians have been watching as our federal government was being pecked away by the ‘Three Stooges’, citing a need to remove Harper and the Conservative for the sake of our economy. They actually believe that in their hands they can steer Canada away from economic crisis. It will be no surprise to any of us that when January 26th comes around and Parliaments sits again, the opposition will accuse Harper of causing our current crisis. But the sad reality is that many Canadians believe that governments can just turn the economy around. I just don’t believe that politicians wear blue and red tights with a cape.

The last economic recession that was felt world wide occurred in the early 1990’s. Canada had just come off a boom, which came to an erupted stop during the middle of 1988 and did not let up until the mid 1990’s. One factor was “Black Monday” when the American markets took the hardest fall since 1929. Although they recovered, lumbering savings and loans were beginning to collapse, putting the savings of millions of Americans in jeopardy. The panic that followed led to a sharp recession that hit hardest those countries most closely linked to the United States, which included Canada. This panic was widely publicized in the press and the result influenced a sharp drop in the consumer confidence index. The average Joe fearing their family’s financial stability socked their money away. The result was a hefty drop in consumer spending in Canada as well as Alberta.

Many will notice that it was during the 1990’s we saw the collapse of the family operated small business being the market norm. The loss of consumer confidence led to many small businesses laying off workers, the development of part-time employees as a standard which in turn saw full-time workers and benefit’s a thing of the past. Many businesses closed their doors or filed for bankruptcy protection. Larger retail corporations put the squeeze on dealerships and franchises in an effort to keep their margins and the collapsed cascaded. When the dust settled and the economy recovered, we saw the rise of the super big box retail shopping centres.

If we look further back to the Great Depression we see a similar economic pattern. The world had just come off of a period of great economic boom. In October of 1930, the American stock market experienced “Black Monday,” followed immediately by “Black Tuesday.” Falling share prices caused a collapse in confidence and consumer wealth. Spending fell and the decline in confidence precipitated a desire for savers to withdraw money from their banks. In short the average Joe began to sock away their savings, pulling money out of circulation. This affected the banks, in that many began to fail. In a desperate bid to raise money, the banks tried to call in their loans before people had time to repay them. As banks went bankrupt, it only increased the demand for other savers to withdraw money from banks. Consumer confidence, failing businesses, unemployment all occurred in that order. It would take over eight years for the economy to be stimulated.

Today, we are coming off an unprecedented economic boom that has been stimulated by the energy market, the rapid growth in housing starts, the continued expansion of the big box retails centres, a gluttony created by a diversified auto industry, and a continued low interest rate set by the Bank of Canada. North America has witnessed lending practices by banks and trust companies that have made the average Joe feel richer than they think. This in turn increased consumer confidence at a 50 year high.

The Consumer Confidence Index, which is monitored by many countries, is showing that as a result of the failing banks and heavy layoffs in the USA and now in Eastern Canada, the average Joe is again socking away their money. The consumer confidence index is showing that retail sales will hit, if not already an all-time low.

Meanwhile, Canadians sit and wait to see if Harper is going to make good on an “Economic Stimulus” package. Yes, many Canadians are watching to see if the government will re-emerge wearing blue and red tights and a wavy cape. But the key phrase here is “stimulus.”

The government can only do so much to stave off a cascade of financial failures. In the end, the lives of small business, retailers, local grocers, restaurateurs, service providers are in the hands of a handful of Joes. You and I, the very factor that the government will try to stimulate. Instead of watching an episode of the ‘Three Stooges,’ we should plan our spending. Invest smart, redirect our saving to support those businesses in our communities, the same businesses that employ our loved ones.

In the end, how deep we fall is in our hands.

Starve'em that'll Learn'em

Last week I sat in disbelief when I read in the Calgary Herald that our Minister of Education addressed the Calgary Chamber of Commerce and suggested to one of the largest business owners groups in Canada to shun high schooldrop-outs.

Dave Hancock suggested that the best way to motivate high school drop-outs to return to school is to just not hire them. He suggests that business owners can help Alberta lower its drop-out rate. “You can help by refusing to hire anyone without a high-school diploma,” said Hancock.
Punish the drop-out, that will teach them! Starve them out! If you have a drop-out working for you tell them to quit and get an education! If your son or daughter dropped out, whether it was recent or even a decade ago, put them on the unemployment line and make them think!

Is this the thinking that our former Attorney General, the ‘peoples attorney’ has? If it is I would suggest that his leather chair in his government office is too soft, and his vision is blurred by heavy cigar smoke. Does he not realize that in Alberta’s recent economic boom that the workforce has been shorthanded? In the past few years some small businesses have either shut down because they can’t hire help, or worse, the long-term employees are breaking their backs doing the work of two people. Not hiring the people who really need a job is not good advice for the Alberta economy.

I was expecting to read responses from journalists all over the province challenging Hancock for his gross short-sightedness. But the issue only got cursory coverage at best. Apparently high school drop-outs have no advocates.

What Hancock may not be aware of is that people drop-out of school for more reasons that just peer pressure or laziness. People have historically been forced from school due to family crisis such as the death of the bread winner, unplanned pregnancy, nervous breakdowns to name only a few.

Hancock’s speech only identified the reasons for a drop-out as greed. He suggests that they are tempted by our oil boom, citing that people are leaving school because they only want the big bucks that Alberta’s Oil Boom will bring. He suggests that after the money fervour is over with the high school drop-out is somehow unworthy of future employment.

I am not advocating people to not finish high school, quite the contrary, but those that have left school find themselves really needing jobs. There are those people, who after experiencing 5 years of reality suddenly find life harder than those who went onto a college or university. As a matter of fact, in Alberta, someone with only a high school diploma is treated much like someone who left school at grade 10.

I would think that a man like Hancock who formally had the position of ‘grand public defender‘, and now has the education interests of our Albertans as a portfolio would come up with a better piece of advice.

His reason for suggesting the shunning was that Alberta has the lowest high-school completion rate in all of Canada. Yet, Statistics Canada reports that Alberta’s drop-out rate has decreased from 15.8% reported in 1993 to 12% reported in 2005, with a national average of 10%. This is a similar trend experienced by all provinces.

Shunning is not what our provincial government should be suggesting. We live in the richest province with the greatest potential. What is needed is dynamic problem solving that would see funding and effort go into retraining programs for adult students. Give business owners incentives to hire those who need the jobs and at the same time motivate those businesses to be flexible with their employees when dealing with workers that are upgrading their educations. What is needed is for Albertans to work together and lift each other up, not tear each other down as is suggested by Hancock.

Do yourself a favour. Hire the person who needs the job. They are the ones that work hard and give you company loyalty. They can also be the type who will not be looking over the fence at every opportunity.