Failure is Fun and Profitable

Capitalism gets a bad rap. Some of it is deserved and some of it isn't. The worst thing is when people don't even know what capitalism is.

Pop quiz: What is the defining feature of capitalism? I bet most of you said "Greed", and you'd be partially right. I prefer to call it "Self Interest", like Adam Smith did.

Actually, the defining feature of capitalism is Failure. That's right: Failure.

Failure is the balance to Greed. While Greed might lead people to take risks with their (and other peoples) money, Failure is what helps rein in the risks.

Small failures help prevent big ones. Just like small forest fires clear out the deadwood, small failures help eliminate poor businesses from the marketplace.

This is why if you ever hear things like, "The company is too big to fail," or "We have to stop this company from going bankrupt to save jobs," or any other nonsense that implies failure is bad, you know that is not capitalism. Government bailouts are not capitalism. Government subsidies are not capitalism.

Frankly, any government jobs are not capitalism because the government cannot go broke. Government jobs are like an actor playing a role. Natalie Portman did a damn good job in Black Swan, but she will never be as good as a real dancer because real dancers have more to lose. If a government agency screws up and goes over budget, who cares? In the real world, the company would go broke. When government jobs are lost, I'm usually happy because the private sector can do it more efficiently, if it needed to be done at all. (Just to be clear, losing a job is tragic. But the idea that creating government jobs helps the economy is crazy.)

Bailing out failing companies is terrible because it not only rewards bad behavior, but it punishes good behavior. All the competitors to the failing company (yes, I'm looking at you Air Canada), who actually know what they are doing, don't get any reward.

Capitalism has many flaws, but failure isn't one of them.

European Crisis De-euphemismified

Politicians use euphemisms so no one can understand the truth. The media use euphemisms because they don't understand the truth.

Here, for your viewing pleasure, is a breakdown of the some of the terms used in the discussion about the European debt crisis*. I've used Greece and Germany as examples (represented by their flags), but this really applies to any country. For example, Iceland's government defaulted on its debt to the UK.

The key thing to understand that when people say "Greece is being bailed out", what they are really saying is "Greece is being given European taxpayer money so they can pay foreign banks back".

And as for all the self congratulating yesterday that the crisis had been averted, mark my words: Greece will default.

Oh, and if you are wondering why I'm drawing up flowcharts about economics when I'm supposed to be an engineer, it is because I have layers, like a parfait**.

* This is available in wallet size, so you can carry it around and look like a dork!
** Euphemism for "I took an economics course once and now I think I understand world economies, plus its lunchtime and I'm bored."

Poker pile-on

Full Tilt Poker, an online poker site, just recently was called a Ponzi scheme. The US governement has upped its attack on poker sites, and in the process, will cost Americans a lot of money.

Full disclosure: I have $14 in my account at Pokerstars.com. I also used my frequency player points to buy a mug and a cap. I originally deposited $50 back in 2005, took out $100 in 2006, and have vacillated between $10 and $30 in the account since then. Obviously, I have a lot riding on this. If Pokerstars goes under, I'm going to have to have that difficult conversation with the wife: "I know I've made some bad decisions. That massage chair for $800 which I never used. Those fur coats for the dogs. Three big screen TVs in 3 years, each time saying, yes, this one is finally big enough for me*. But now, its going to be Kraft dinner and tuna for the next few weeks. Wait, what?! I just found $14 in the couch ... never mind!"

Back in 2006, the US government slipped a section into the SAFE Port Act that made sending money to online gambling sites illegal. This was a big blow; some sites pulled out of the US and others declared they would still serve Americans. The next few years, online floated along in a grey area (like Canadians getting US satellite signals or picking up a chocolate bar off the ground and still eating it) and then "Black Friday" (Apr. 15, 2011), where the US government arrested representatives of the big online poker sites and shut down the websites. Their big claim is that poker site "tricked" banks by disguising charges. Now the US has made a further complaint, that Full Tilt is a Ponzi scheme and doesn't have enough money to allow players to get their deposits back.

This is so annoying. Hey, you know what else is a Ponzi scheme? CPP! The money young people give to the Canadian Pension Plan isn't invested or put in the friendly giant's mattress; it pays for the old retired fogies. But don't worry, when you're an old fogy, there will be a new batch of suckers to pay for your retirement. Or something.

That was annoying thing #1. Here's number #2**: poker players warned about this. Hey Sherlock, if you make it hard to get money out of a poker site guess what? It becomes hard to get money out of a poker site. The reality is people are going to play online poker because casinos are creepy. I'd rather sit in my underwear and play poker with my wife sitting in her nightie on the couch next to me ... wait. Okay, that's a bad example because 14% of the time you'll see that exact scene in a casino. But you get my point. And with the US government making it much harder to legitimately get money on/offline, you push poker players into having to use shadier methods. Like sending checks to the pokersite with sneaky names like the "Ace of Spades Non-Gambling Charity Foundation".

Annoying #3 is poker is not gambling! I know, you might think it is because there are cards and a dealer, like blackjack (which is gambling). But its not, because there are players that consistently win. What's that? Your aunt Sally wins at blackjack? No, actually she doesn't. She's stealing from you uncle. But the other reason why it can't be a game of chance is that you don't have to show your cards to win. You can bluff. The last reason is that you get to check your cards first before you voluntarily put money it. In blackjack, craps, and roulette you have to pay before you get your cards, the dice are rolled, or the wheel is spun (raggedy man!) Not gambling mean laws that apply to gambling don't apply to poker.

So what we have is an activity that adults freely engage in and the US government has declared war on. So what that a bunch of players are going to lose a bunch of money. Collateral damage.

Now Full Tilt isn't helping by mismanaging its funds. But the scary thing is the exactly same thing would happen if everyone decided they wanted their money in their TD checking account (worse ... see below). The US government is making a big deal about the fact Full Tilt has $400MM in liabilities and $40MM in cash. But what they don't mention is these sites make about $1MM a day in profit. Like all businesses, cashflow is much more important that net assets. But if the US would stop being so anti-online poker, these sites could set up in the US and be regulated. This is win-win, because they would pay taxes and they would be regulated so they would be required to keep some percentage of deposits available.

Okay, now something that will scare the hell out of you. Full Tilt had 10% of its deposits in reserve. In banking, this is called the "reserve rate". And Canada phased out "reserve rates" back in the 90s. Yes, that means that banks in Canada are free to lend out 100% of the money you deposit. But don't worry. Because the powers that be are dealing with this huge gambling problem.

* Phrasing!
** This is like saying "number number 2", but it made me laugh, so it stays in.

Unite without unions?

Air Canada flight attendants, members of CUPE (Canada's largest union), are planning to strike tomorrow. It was only back in June that the government nearly had to legislate the Air Canada call-centre staff back to work. Some questions come to mind when I hear all this. Why aren't there strikes at Westjet? Why does the government have to legislate people back to work? Why are unions necessary?

When I was in college, the teachers at my high school went on strike. They needed people to help the students, so I volunteered. My dad, at the time, didn't say much, as I was an adult. But I think it was pretty scandalous, me being a scab. Frankly, I needed some money, and I felt bad for the kids, so I decided to help. I didn't have to physically cross any picket line, however.

In the years that followed, I started to feel bad about doing that. That is about the time I read a lot of Noam Chomsky, and thought "the man" was screwing everyone over. I worked at a lumber mill one summer, and I remember a poster in the shop: "Your boss needs you, you don't need your boss." I've come to realize that capitalism is a heartless economic system, but it better and freer than any other system out there.

Collective bargaining is entrenched in law in Canada, while in other places it is voluntary. Here is why I think mandatory collective bargaining is not necessary.

Say I go into Walmart and I want to buy a $10 soccer ball. I say to the manager, "I want 10% off this ball." He says no, and I leave the store. Both of us are free to bargain and then agree to terms.

Now lets say I go into Walmart and I represent a soccer league (a collective). I say to the manager, "I'm going to buy 100 soccer balls and I want 10% off." There is now incentive for the manager to deal with me. He can sell a lot of balls at once and since he's just dealing with me, there are savings (rather than selling 100 balls to 100 people). He counters with 5%, and we are both free to accept or decline the terms.

Imagine that I want my 10% but he is unwilling to give me that, so I barricade his doors and shut down his store. This is essentially what Canada's collective bargaining laws are like. There is already incentives for management to deal with a group of people, rather than just each person separately. There is no need to make it law. But when it becomes law, it distorts the normal functioning of the market.

If employees bargain as a group, they gain some leverage over a company. But there needs to be balance, or else it is just legalized extortion. If a collective's demands outweigh the cost to fire all of them and retrain new employees, then the company must have that option. Of course, smart companies know that this is a last resort and would only be done if the employee collective was being totally unreasonable. But company management understands the broader picture. Public companies have stockholders who must be paid. They know the market climate. Employees are just one piece of the puzzle.

Because employers are not allowed to fire unionize employees, we end up with a system that constantly needs government interference and legislation. If collective bargaining were voluntary, like all contracts, the market would function much better.

It is tough to talk about this because I know many people with government pensions. I think talking about pensions (specifically) and unions (in general) usually gets bogged down in the historical function of unions, which was to protect workers from oppressive and unsafe working conditions. I don't really think these are an issue anymore because they are now covered by Canadian law. And I don't think non-unionized companies are unpleasant to work for.

I think my biggest concern with unions is they foster an "us" vs. "them" attitude between employees and management. This is why, I believe, Westjet doesn't have strikes. The union isn't necessarily concerned about budgets and cashflows. Its mandate is to get the best working conditions and the highest salary. I don't even think they are that concerned about maintaining workers for the future. For example, if there is a 10% cut to a school districts budget, and the teachers union declares they have to let go 10% of the teachers (mostly the new hires), they are being disingenuous. Everyone could take a 10% pay cut and then everyone could keep their job. (Of course, upper union managment couldn't afford $1000 pants anymore*.) These are the types of compromises that other companies make all the time. Smart companies know that everyone taking a pay cut while times are tough will significantly save training money in the future when business picks back up. These are the types of things that unions aren't really concerned with.

I think unions may have outlived their usefulness. I think people should be free to enter into legal contract with whoever, and however, they want. I think workers and management, pulling together with the same goal (success of the business) is a much more effective strategy. Of course, if I ever get a unionized job with a pension, forget I said any of this.

*I'm serious. I'll tell you about it someday.

Greek Tragedy

You may be asking yourself: what is going on in Europe with this so-called debt crisis? Why is everyone freaking out about Greece? What's "contagion", and is their an ointment for it? Is there a financial zombie apocalypse happening? I'm going to try and answer all these questions. This is an interesting topic because people make it more complicated than it is. You can actually relate it to things like your household budget very easily.


Let's start simply, with budgets. Countries, like households, have income and expenses. Countries get income through taxes. Taxes tend to be related to a countries gross domestic product (GDP), so the more stuff a country makes, the more its government makes in taxes. If a government spends more than they earn in a given year, it is called a deficit. Do this enough, and that will lead to debt.

Debt isn't a bad thing, as long as it is a reasonable percentage of income. Most of us are comfortable going into debt to buy a house or a car. In Canada, household debt as a percentage of yearly disposable income has steadily increased from 90% in 1990 to about 140% today. The same idea can be applied to countries. For example, Canada's debt to GDP ratio is about 34%, which is reasonable. However, this is only the debt owed to Canadians, called "internal debt". We also have debt we owe to foreigners, which is about 75% of GDP. This is called "external debt".

You may be asking, how can countries have debt? Where does the money come from? Let's go back to our household. Say you buy a house and get a loan from the bank. This is "external" debt, because you borrowed from someone else. But say you want to buy a car but the bank won't lend you money. You could raid your kids college fund, or you borrow from your rich aunt. These could be thought of as "internal" debt.

How do these translate into a countries debt? Well, most countries issue bonds, which are basically I.O.U.s which both citizens and foreigners can buy. You give the government some cash and the government promises to pay you back. The interest rate the government agrees to give you depends on a how risky lending them money is. Stable countries have relatively low interest rates because they don't need to entice people to give them money. Unstable developing countries need to pay more to entice people to give them money because there is a real risk that they could default. The free market determines the interest rate on bonds. For example, the current Greek 2-year bond rate is 28% (i.e., if you lend Greece money for two years, they'll give you 28% a year interest!) Compare this to Canada's 2-year bond rate of about 1.5%.

What does "Greece has a debt crisis" mean? What it means, basically, is Greece spends more than it earns, and it can't make regular payments on the debt it owes to citizens and foreigners. As of 2010, Greece owes 165% of GDP to foreigners (mainly European banks) and 130% of GDP to citizens (mainly entitlement programs like pensions and benefits). Because they are having trouble paying people, no one will lend them any money, and if they will, it is at insane interest rates. This is like not being to pay down a credit card with 10% interest, so you get a credit card with 20% interest to try and make payments -- clearly not a sustainable situation.

(I'm going to take a quick aside here. You may be thinking, "Why do countries have to ask anyone for money? Why don't they just print it?" Some countries do that. The U.S. is doing that right now with their "quantitative easing". The problem is that unless you are a totally self-sustaining country, you have to buy stuff from other countries. If you debase your currency too much, the price for other stuff like oil and grain will just keep getting higher and higher. Eventually, when everyone loses confidence in your currency, hyper-inflation happens. For example, Zimbabwe has a $100 trillion dollar bill.)

Since Greece is a part of the European Union, the fact they are in trouble is affecting everyone. The European Union will help them out, BUT Greece has to get things under control. Foreign banks have put pressure on Greece not to restructure the debt they owe to them (restructure is a fancy term for saying: "I'm broke, so do you want some of what I owe you or none?") Internal debt is much easier to muck around with, so that is what Greece is doing.

Just like we raided our child's college fund to pay for our car, countries can do similar things. Eliminating pensions and benefits are one way. Pensions are a liability, whose cost is born by future generation. To get Greece's spending under control (so Greece can continue to pay back debt to foreigners), the EU is asking them to undertake "austerity measure" (also called "belt tightening" or "belt selling and giving the profits to banks"). If Greece does this, the EU will lend them some more money.

Let's create a detailed example to show what is going on. You buy a house, and are paying a $1000/month mortgage. You want a car, so you take the money out of your kids college fund, and are repaying that back at $500/month. Then your wife loses her job so your monthly income takes a hit. What do you do? You start getting credit cards, at progressively higher interest rates to continue living the life you are accustom, plus paying down your mortgage and replenishing the college fund. But things reach a breaking point. No one will lend you more money. So you go to your rich aunt and say, help, I need money. She looks at your situation and says, "Okay, I'll lend you the money, but you need to balance you budget. You can't spend more than your earn, so you'll have to cut back. No eating out and no new video games. If you do that, I'll lend you the money." You say, "Auntie, don't you know the bank manager? Perhaps he can reduce my mortgage so I can pay less per month?" The bank manager is not pleased to hear this, which your Aunt conveys to you. "Sorry, I think you're going to just have to stop paying into the college fund until you get back on your feet." Given all the pressure, you relent. You cut back (but wife and kids aren't happy), and the college fund payments stop, but the mortgage payments continue on at the same rate, and you get some much needed spending money to make it to next month.

Sounds like a reasonable story, right? Wrong. Greece (and Ireland) should do what Iceland did, and that is say "screw you" to the bank. Iceland had huge foreign debt, but rather than destroy their own country for some foreigners, they shared the pain all around. It isn't perfect. But defaulting is a safety valve in the capitalist system, and is required. The reason is there are always two parties to every transaction: a lender and a lendee. Both have to be kept responsible so neither abuses the system. Lenders have to do their due diligence to make sure they are lending money to people who are able to pay it back. Also, lendees have to be responsible and not take on too much debt. But when things get out of control, all parties involved need to share the pain.

Don't get me wrong, countries like Greece have to stop this insane socialist experiment and balance the books. Democratic governments always have this danger: that they will get caught in a cycle of bribing people with their money. As Thatcher said, "Socialism works until you run out of other people's money to spend."

The final issue is this stupid word "contagion". I hate it. It sounds like financial crises are colds that other people can catch. This is nonsense. The reality is if one person in a community gets laid off, then chances are others are getting laid off too. If a recession hits a community and a bunch of people's houses got foreclosed, you wouldn't say, "We've got to get this foreclosure contagion under control before it spreads to other people." The PIGS nations (Portugal, Ireland, Greece, and Spain) are in trouble because they spend more than they earn. If other nations (I'm looking at you Italy) start having the same problems, its not because they were infected with anything, but because they too spent more than they earned.

How I Learned to Stop Worrying and Love the Mart

Revelation Chapters 6:12: "And I beheld when he had opened the sixth seal, and, lo, there was a great earthquake; and the two most unholiest of shoes were joinithed togetherith, forming a monstrosity which shall markith the feet of his dark army."

This picture was taken at Walmart, which many consider the evilest of stores. In this blog post, I'm going to try and convince you of something: Walmart isn't really that bad.

I watched a documentary about Walmart (I think it was "The High Cost of Low Price") and it made me not like Walmart. I didn't shop there for years and instead went to Zellers or Superstore. After a few years of pain and suffering, I changed my mind.

Zellers is that absolute worst store in the world for customer service. I have left my basket (full of stuff) and walked out of Zellers more than any other store I've been to. These people just do not want my money.

Question: How many idiot cashiers does it take to determine the price of a can of beans? Answer: It is actually a trick question. It takes three of them, milling about, to figure out they need to call a manager to come over and answer it. When the line-up goes back into the housewares section, it is time to get off your cell phone and open another till.

Many Zellers have self check-outs, which are awesome because 4 tills can be watched by one person, but they never use them. Instead, they have gone to the committee-of-three cashiers model because apparently they only hire people with 1/3rd of a brain. Cashiers are the one place where you want an abundance of staff, because that is where money changes hands.

The other day at Safeway, I tried to buy a chocolate bar and the scanner wasn't recognizing it. The cashier asked a bagboy to go check the price, and I said forget it. The cashier said to me, "Can I offer you the chocolate bar for 50 cents?" Impressive customer service.

Which brings me to Walmart. That store is a joy to go to. The aisles are wide, the staff are friendly, and they get you through those tills fast. There are always dozens of cashiers on.

I'm going to try and read your mind. Right now you are saying:
"But Walmart destroys mom and pop stores."
"Walmart treats its employees bad and bust unions."
"They keep prices too low." What?

Mom and pop stores suck. There, I said it. My wife worked retail for years. Small business owners are crappy to their employees. Here's an actual conversation:

• "So, there will be a staff meeting on Sunday for 1 hour after the store closes."
• "You know that you have to pay everyone a minimum of 3 hours, right?"
• "What?"
• "That's the law."
• "I've never heard of that. I'll tell you what, I'll make it 45 minutes, and I'll bring it cookies."
• "You can bring in anything you want, but you have to pay us for 3 hours."

My wife was never invited to a staff meeting again. You think Walmart can pull that sh!t?

I remember when I worked for Dairy Queen back in GP, the owner used to get some of us guys to go over and mow his lawn and do general yardwork -- during work hours. There is no way that is legal. The mythical mom and pop don't exist -- all business owners are dicks.

The advantage to mom'n'pop stores is that mom and pop will spend money in the community and not ship it back to corporate headquarters, or to foreign shareholders. This is one of the best arguments against Walmart. Unfortunately, it doesn't carry the weight on we look into it.

Let's take the Croc-o-pedic shoes in the photo above. Let's say they cost $10 at Walmart, which can be broken down into:

• $5 - wholesale cost of shoes, which goes to some Chinese manufacturer
• $2 - wages to employees
• $2 - overhead like rent and power
• $1 - profit to head office and/or shareholders

The problem with mom'n'pop stores is they buy the same stuff from China, but they don't have the clout to get them to lower their prices. So you get the same foam-a-geddon shoe, but its more expensive, say $15.

• $7 - again, wholesale to China
• $4 - wages (assuming mom'n'pop are better to their employees)
• $4 - overhead (because they have a smaller store that is not in some industrial park, so the relative cost is higher)

So in this example, buying your mac-goofy-shoes at Walmart causes $6 to leave the community, while buying them at mom'n'pops pulls $7 out of the community. This is just ignoring the fact you spent more of your hard earned money on the shoes. The only time that mom'n'pop stores have an advantage is when they are selling locally made products. In that case, I fully support local businesses. But if you are buying Chinese-made shiny crap, then buying from mom'n'pops is just throwing your money away.

Note: I have nothing against Chinese products. They are awesome. But America really screwed up. You know the expression, "A capitalist will sell you the rope to hang him"? In the pursuit of short-term profits, they outsourced all their knowledge. So now, there is really nothing China can't make. I for one, will welcome our Chinese overlords.

On a final note, the reason these fitness shoes alegedly work is they make it more difficult to keep your balance and walk, so you have to work harder and therefore burn calories and tone your muscles. I see elderly people wearing these and I think, What the hell are you doing, this is going to make you more likely to fall. I guess you'll lose a bunch of weight when you are in the hospital with a broken hip.

Tune in next time when we open the Seventh Seal of the Apocalypse!

College FUN'd

A recent Macleans article stated 32 per cent of Canadians said their retirement would be partially funded by a lottery win. I, of course, put that Macleans magazine in a vacuum sealed bag, where I will store it for 30 years until it becomes valuable. When I finally do remove it from storage, I'll chuckle at all those dummies waiting for their LottoMax win.

Here is a list of other items which will pay for my retirement:
- Dungeons & Dragons action figures, including a Shambling Mound(TM),
- a box of comics, including the complete run of Power Pack,
- one silver suit, one purple shiny shirt, and one purple sock tie, worn to a Grade 9 dance.

Wait. What was that? Okay, my wife has just informed me that the silver suit has been donated to Goodwill. Good job, honey! Some hobo is cruising in the Mediterranean right now!

To be perfectly frank, I'm still mad at my parents for allowing me to open my toys. I would not have to work right now if I had all my Micronauts in their original cases. Which brings me to the point of this post: my son's college fund. We keep it in a plastic container in the basement marked "Broken Glass and Poison" (to deter and confuse any would-be robbers).

The college fund contains: Two mint condition Darth Maul figures (with a commtech(TM) chip so Darth Maul can yell at you if you tease him about his tribal tattoos!); One slightly melted bar of Fight Club soap, obtained from a screening of said movie; One sealed Pokeball from a McDonald's happy meal (I hope its you, Charizard!!!); One wind-up elephant from the Disney movie Tarzan, again, from a McDonald's happy meal.

I know what you are thinking and I totally agree. I'm too heavily invested in McDonald's products. I had a Burger King cardboard crown in the collection, but it was damaged when the Fight Club soap melted. Note to investors: do not put your investments near a heating vent!

Oh, and I think I put $30 in RRSPs this year too. See you on the beach!

Broken Windows ...

When I was 11, I was playing croquet at a friends house and I put a ball right through their basement window. I was goofing around and decided to pretend to hit the ball on my backswing. "Haha, look, he can't even hit a croquet ball!" I neglected to look behind me and the ball ended up in the basement. I remember sitting in my room later that night, listening to my dad talk to my friends dad, apparently discussing how much this was going to cost.

There is no doubt that breaking that window removed wealth from the world, but not all the world. The glazier that my friend's dad later called gained some wealth, exactly the same wealth that my dad lost. However, this is not the only cost. There was an "opportunity cost" that my dad also endured, as he had to forgo something else (perhaps a delicious steak dinner at Mr. Mikes) to pay for my foolishness.

Some (thankfully very few) commentators have commented that the recent earthquake may be just what Japan needs to "stimulate" its economy. This is a classic example of the Broken Window Fallacy. They could be forgiven for this error because the typical measure of a country's economy is the Gross Domestic Product (GDP). The GDP is a measure of all wealth generation but not of wealth destruction. This leads to the paradox that building a house, burning it to the ground, and building it again creates a higher GDP than just building it once.

Let's go back to that cursed croquet game. Imagine that instead of breaking the window, the ball duplicated it. Sitting on the ground is the wayward ball and an exact duplicate of the window, frame and all. Since this is the exact opposite of the above situation, it is easy to see what economic results are. We can sell the free window and pocket the money (hello Mr. Mikes!) Unfortunately, the glazier will not be happy when he finds out about our magic window duplication scheme. Wealth is created in the world, but not all the world.

Which leads to my final thought ... on copyright infringement. Copying a CD, a movie, a book, or a photo will indirectly remove some wealth from the owner of the content, just like it the glazier in the second universe. But this will not remove wealth from the economy. It cannot. Just like a broken window cannot add wealth overall, a duplicate window must add wealth.

The Market Works

The free market works. How many loaves of bread to make next year? The government could do studies and create models, instruct bakers on how much to make, and then legislate and enforce the price. This was actually done in China and Russia. But, of course, they were disasters, with massive shortages or surpluses, and rife with corruption.

The alternative is let price determine what should be produced and who should produce it. If no one wants to buy SUVs, why should the government get involved? The free market is democratic, and the people have spoken. Giving GM, Ford, and Chrysler money is like giving money to Croc's when that strange foam shoe goes out of style. Tastes change and companies come and go.

Of course, the market can be brutal. It took a few years for the affordable housing crisis in Calgary to sort itself out and while the market works, people can suffer. This is where the government should be focusing. Put money into retraining and relocating people whose jobs were lost. Invest in new companies (and entrepreneurs) that need help getting started. This insane notion of "trickle-down" economics, that giving GM 15 billion will somehow trickle down to the workers, is an absolute waste. 12 months later, GM will still fail, but the money will be in the pockets of owners, managers, union leaders, etc. and the employees will still have to go find another job, go on EI, etc. Reckless spending on things we can't afford, using money we don't have (the magical "equity in your house"), is exactly the reason we're in this mess. You can't spend your way out of this, hoping that people start buying SUVs again. We need to save. We need to regroup and focus on working hard, creating products that people need.

This is all the stuff our grandparents knew. Hard work and prudent financial decisions is what make a country strong, not granite countertops and trips to Mexico.