September 2009 newsletter  

Battleship guns. Original image in US Navy National Archives -- USS Massachusetts 1943


 Shots
  across the
  bow
 

Thoughts about real estate from the buyer's point of view

A monthly newsletter sent out to previous and present clients as well as a selected list of different businesses in the Niagara Peninsula

September 2009
This isn't a game
 Prime Minister Stephen Harper.
No, it isn't
Most of us are advised that politics shouldn't be a topic in everyday conversations.  It can too easily trigger passionate outbursts.  Individual views are strongly held much of the time and all too often result in angry rebuttals when you try to challenge them.
This, though, has always seemed to me to be an unfortunate aspect of human discourse.  Differences of opinion are healthy and approaching them with open instead of closed minds ought to be one of the rules of polite society.
'T ain't so, however, is it?
The current spats about defeating Prime Minister Harper's minority government are as good an example as any of how supposedly intelligent people are stepping outside the bounds of reasonable consideration of facts and figures.
And no, this doesn't mean that I support the Liberals or the NDP or, for that matter, the Conservatives.  In fact, I think that it's become difficult for many of us -- and I'm certainly included in their number -- to decide what our political label happens to be.  The cynics among us have lost much of our previous respect for members of parliament.  What is thought to be their weakness for breaking promises is one reason.  Their fondness for scoring points against one another is, well, another.   Commonsense appears to have no place on the floor of the House.  The political theatre seems to be unduly marked by prevarication and bluster. 
Yet I'm not afraid to take issue with the prospect of another election.  The last two didn't resolve very much and I find it difficult to think that a third one will improve our present situation.
And in case you're wondering what this has to do with real estate, well, just give me a few more sentences.
 
A rest is as good as a change
In times of war, there's been a practice of coalition governments.  Against a common enemy, there has seemed to be no purpose to party squabbles.  It's been felt that wisdom lies in conducting and managing the fighting by consensus.  Individual differences ought to be set aside in the interim.  There's no good reason why they shouldn't be held back until peace returns. 
But are our struggles towards economic recovery, and never mind prosperity, any different from a battle that needs to be won?  How long will it take to beat back the waves of job losses and financial hardship?  Are we involved in a simple fight?  How soon will victory be declared, or is it even a certainty?
As I see it, a change in government isn't going to do any real good.  It's sort of like a new prime minister deciding to replace the present rifles or tanks with alternative weaponry.  Will this advance the outcome.  Will it more effectively defeat the enemy that the present federal administration is facing?  Will victory become more certain?
Not in my view.  It's more a case (if I can change the metaphor) of changing horses in midstream, isn't it?   But surely the need to get to the other side will remain, won't it?
No, the political grandstanding by Harper, Ignatieff, Layton, or any of their supporters seems to me to be uncalled for, all sympathies for any of them notwithstanding.
What I have to believe is that we should simply let Harper stay in office while reminding him that he doesn't have unlimited power to do whatever his arrogance (and yes, I think we can charge him with this fault) leads him to do.
Let's stay with what we've got and let's give the idea of a change a needed rest.
 
Upsetting the market
If we appear to be moving back to a more active interest in housing purchases, I'm concerned that an upheaval in Ottawa is likely to bring about, at the least, an unwelcome and unnecessary  pause.  The economy as it is can be seen as somewhat fragile.  The (unforgivable) greed of Wall Street has brought Canada, no less than the US, the UK, and other countries around the world, close to a repeat of the 1930s Great Depression.   In response, regardless of political differences, the consensus has led to the concept of prime pumping national economies rather than leaving them to put themselves right on their own.
Can we, though, expect that an Ignatieff government (or what might be a coalition of Tory and NDP strange bedfellows) will significantly alter the emphasis?   It's hard to envisage that switching to a Liberal minority (and a majority for any party does seem to be an unlikely prospect) would mean that the promise of underwriting the chance of financial recovery will get broken.  No self-respecting Liberal is going to increase the harm being endured by the citizenry.  If anything, such a likelihood is more in keeping with the Conservative view that government shouldn't involve itself in any interference with the normal flow of trade.
Yet, although politicians rarely face up to the truth, at least as far as their public pronouncements are concerned,  the reality is that circumstances severely limit the fiscal possibilities.  I can, for example, recall a talk that Edward Heath, the one time prime minister of England, gave to a Toronto business group all the way back into the 1970s.  In it he explained that regardless of how many promises he and his party had made during an election, there were only three that could be honoured from a financial standpoint.  This forced him to decide which ones he'd keep and which ones he would have to overlook with (as he pointed out) the hope that no one would remember that they'd been essential planks to his platform.
Truth will out, indeed.
But if we recognize this fact, what sense is there in our being pushed into another election?  At the very most, the fundamental idea of incurring huge financial indebtedness as an aid to economic recovery isn't going to be abandoned.  Perhaps specific funding will be slightly altered, but the principle will stay in place.
More than this, though, I cannot perceive any self-respecting Liberal choosing to bring the national debt to a halt.  The only way to do so would be to increase taxes, even though this step is unquestionably going to be necesary at some future point.  However, whatever can be said of the Liberal party, its reputation hardly amounts to reducing our tax bills.  That, surely, is a Conservative preference.
All told, I'm forced to think that Michael Ignatieff, let alone Jack Layton, is simply sounding off with what his supporters want him to say.  His true intentions are, to my mind, to let Stephen Harper hang himself with the national debt he's building up.  Tackling it is for another day.
Political games indeed.
 
Role reversal
In my view, it isn't unfair to decide that the present leaders of the Conservative and Liberal parties are forced to behave in ways that are largely opposed to their upbringing.
On the one hand, Prime Minister Harper has had to move far to the left of his right wing idealogy.  His stimulus programs and their impact on the national debt are a nod to the U.S. Democratic attempts to bring the economy out of its doldrums.  As such, they're a long way from the Supply Side Economic conservative thinking of governments led by the likes of Ronald Reagan and Margaret Thatcher.
On the other hand, Michael Ignatieff, as Leader of the Opposition, has to be aware that what can be thought of as the left wing thinking of Keynesian Economics is the necessary path to recovery.  How easily, then, can he find fault with what the man he'd like to replace is doing?  What different road is he at all likely to take?
Politics do indeed make for strange bedfellows, don't they?
 
The lack of respect
If politicians aren't thought highly of these days, I'm tempted to think that another reason lies in their failure to give sufficient respect to those who vote for them.  There's a reluctance to face up to and discuss the realities.  There's too much emphasis on promises that are probably not going to be kept.  There's an unwillingness to accept that voters have the intelligence to understand that some things are possible while others don't stand a chance of being brought into being.
Yet no one nowadays can attain high office without a well grounded education.  Both Harper and Ignatieff have this and, in the process, have been exposed to healthy discussions about issues of the day.  They also know that not only can there be agreements to disagree on occasions, but that there are also times when it's better to set differences aside.  How refreshing it would be, then, if they would both let the stimulus programs take their course:  the end result is surely what they, along with everyone else, want to see achieved.
In a sense, the cost of what the Harper government is doing isn't much different from the indebtedness that waging and winning a war involves, is it? 
 
Back to the market
All told, I have to believe that the recent upsurge in house sales has some cause in the economic prime pumping that has occurred.  Given this, I'm not readily convinced that switching to a different governing party will ensure that the real estate business will see any benefit.  And worse still, it may be faced with a loss of momentum, if only a temporary one.
In fact, I think there'll be a better time at a later date for Ignatieff to withdraw his support for what he cannot fail to see as, ahem, the application of left-wing thinking by a party leader whose instincts lie in an entirely different direction.
Or, if you wish (if I can switch metaphors one more time), I think that, at this stage in the political game, the Liberal party's best bet would be to let sleeping dogs lie. 
 
Duncan Pollock, Exclusive Buyer Broker Duncan Pollock, Real Estate Broker,
427 Gate Street, Niagara-on-the-Lake,
Ontario, Canada L0S 1J0
Tel: 905-468-3154 Fax: 905-468-3812
Cellular: 905-704-9037
email:
duncanpollock@sympatico.ca
Note: E-mail address changed as above on Nov 3 2007
website: http://www.duncanpollock.com 
 
PS. One of my web pages provides a list of the other newsletters I've sent out. If you choose to go to it, you can click on any title to bring up its full text.
PPS. I've recently been invited and encouraged to create a second website, one that deals with my approach to the industrial, commercial, and investment real estate market. You can reach it, if you're so inclined, at http://www.iciniagara.com. 

This is an online copy of my September 2009 newsletter -- and you can find a list of the other ones I've sent out by clicking here.
If you aren't already included in my mailing list, you are most welcome to add your name to it so you can receive a similar "Shot Across the Bow" each month.
There's nothing hard sell involved, I can assure you.  Rather, the idea is to share my thoughts with you about how I believe buyers can be better served by the real estate industry.
Thank you.


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