Market Crashing! World Evolving?

What does it mean? Should we stop in our tracks and hunker down for a long winter with a cellar full of potatoes, squash and Vanity Fair magazines? Does it mean that we adjust our value meter so that we ensure each dollar we spend is well placed...well considered...well judged, or do we optimistically keep on carrying on just as we have been - shopping across the border when our dollar shines?

In speaking to another small business owner the day the USA House of Representatives voted no to the $700 billion rescue plan - the strategy was clear and precise...review every client and be able to demonstrate how we add value to the bottom line, how we are not an expense to do without...how we are an integral partner. Of course this is a brilliant strategy regardless of the economy!

One week later the senate approved the bail-out plan and we seemed to breath a sigh of relief that once again we didn't have to take responsibility for our actions. Could it be true that 85% of voters in North America want to have the Government regulate, legislate and generally control all the facets of their life? It seems everyone is looking for the next leader who will bring their company, their county, their local, national and global economy out of the red.

We deserve a house, a car or two, holidays, $100 jeans, cell phones for every family member and flat screen TV's!!! It's the dream - the great North American hallucination. The only difference between the red maple leaf and stars and stripes is that Canadians cannot deduct interest payments from income when filing income tax returns - otherwise we northern neighbors bench mark ourselves against our southern brothers.

Forward through the rearview mirror. [Marshall McLuhan]

The 1929 stock market crash ushered in the Great Depression. Stocks were down about 80% from their high, high, highs in the late 1920’s. Demand for goods declined. New investment could not be financed and the banking system was in chaos. President Roosevelt closed banks in the the USA for three days – referred to as a "bank holiday." A select few banks re-opened with limits on withdrawals. Eventually, confidence returned to the system and banks were able to perform the functions of savings and loans.

In the 1970’s the USA experienced Stagflation, a condition of slow economic growth and relatively high unemployment - a time of stagnation. Fuel was in short supply and North Americans realized for the first time that they were dependent on fossil fuels. Bicycling was went through the biggest boom in USA's history.

In 1983, we experienced the Goldilocks economy. What was considered to be a recession ended in 1991 with a steady and steep upward climb, low inflation rates and low unemployment.

Canada's economy depends about 75% on the USA, so Canada is vulnerable when the USA is vulnerable. Canada has a resource economy: oil and metals, natural resources but unless Canada sells fully 75% overseas and 25% to the USA, they will remain within yanking distance.

Lessons are learned in a bad economy. Lots of lessons. For example, Canada did invest in sub-prime mortgages and so, out of this debacle new regulations will float to ensure that sub-prime investments are a thing of the distant past. Made in China looks like it no longer passes the purchase test and people might be wiling to pay a little more for something manufactured in North America – we might even increase the middle class, the working class. The big lesson is about being a debt economy, about not relying on home equity to finance other purchases and we need to consider, in a very serious way, our dependence on energy or fuel.

So is the ecological plan completely different than the plan for the economy... Preservation, pollution reduction, revising how and why we travel...thinking twice before we make a short-sighted decision to strip lumber off the sides of mountains – these are ecological considerations, but they are also reminiscent of leveraging what we have for short term gains. My brother told me the other day that the Ice Age was only 10,000 years ago...That’s incredibly recent, actually. Is this a wake up call? A time, finally, to be forced to stop and ponder many of our recent bad decisions around over-building, around cashing out farmland, around water, product and the actual cost of fuel – in production, consumption and to the environment.

What have you done differently as a result of the screaming headlines and the doom and gloom forecast for a worsening situation? There are gross excesses and abuses yet it seems no critical lessons will be learned this time around either.

It's acid raining on my SUV!