Not One Bank Failure In Canada! - Very interesting

In this current "worldwide" economic crisis, there's one country that hasn't had even one bank failure, calls for a bailout or government intervention in the financial or mortgage sectors. Guess which one?

HINT: It's very close to us. In fact right next door. Give up? CANADA

Fareed Zakaria has an excellent write-up in this week's Newsweek magazine.

It seems good old Canada did not follow the US in all the deregulation nonsense. They still have the equivalent of Glass-Steagall intact up there. No laissez-faire, unfettered capitalism for them. While those countries who followed the American neocon model are wallowing in debt and writhing in financial pain and uncertainty, Canada is poised to profit, thrive and take advantage of opportunities that the envious unfettered capitalists are in no position to while they sit on the sidelines trying to figure out a way to get themselves out of the present mess.

According to Zakaria:

Canada has done more than survive this financial crisis. The country is positively thriving in it. Canadian banks are well capitalized and poised to take advantage of opportunities that American and European banks cannot seize. The Toronto Dominion Bank, for example, was the 15th-largest bank in North America one year ago. Now it is the fifth-largest. It hasn't grown in size; the others have all shrunk.

So what accounts for the genius of the Canadians? Common sense. Over the past 15 years, as the United States and Europe loosened regulations on their financial industries, the Canadians refused to follow suit, seeing the old rules as useful shock absorbers. Canadian banks are typically leveraged at 18 to 1 — compared with U.S. banks at 26 to 1 and European banks at a frightening 61 to 1. Partly this reflects Canada's more risk-averse business culture, but it is also a product of old-fashioned rules on banking.
In addition Canadians cannot deduct mortgage interest, and unlike in America, cannot just walk away from a mortgage so a default is your problem not the bank's. Despite all this there is a higher rate of home ownership in Canada than in the US.

Other virtues of the Canadian system according to Zakaria:

Canada has been remarkably responsible over the past decade or so. It has had 12 years of budget surpluses, and can now spend money to fuel a recovery from a strong position. The government has restructured the national pension system, placing it on a firm fiscal footing, unlike our own insolvent Social Security. Its health-care system is cheaper than America's by far (accounting for 9.7 percent of GDP, versus 15.2 percent here), and yet does better on all major indexes. Life expectancy in Canada is 81 years, versus 78 in the United States; "healthy life expectancy" is 72 years, versus 69. American car companies have moved so many jobs to Canada to take advantage of lower health-care costs that since 2004, Ontario and not Michigan has been North America's largest car-producing region.

What this tells me is that Zakaria is not a Republican. Touting the virtues of a "socialized" country with a "socialized" health care system? You've got to be kidding. Wait till Rush Limbaugh gets wind of this. In fact the banner on the cover of this week's Newsweek is "We Are All Socialists Now." Tell that to the Republicans who routinely disparage, demean and demonize socialism wherever it rears its ugly head! Just the mention of the word is enough to send them into paroxysms of apoplexy. I suppose UTR, a commenter on Robert Reich's blog, will cancel his subscription to Newsweek now - not that he's a Republican, mind you.

In worldwide economic councils, Canada is pushing for economic reforms that would emulate its approach. Let's hope they are successful, and the free market, laissez faire, trickle down, Reaganomic, Milton Friedman, Chicago School model is cast into the dustbin of history.