I suppose the good news is we aren't in the property development business in Iceland.
The collapse of financial markets around the world has been astonishing, although not surprising. Who in their right mind could imagine such swift international carnage and yet it all makes sense. It's been a big pyramid game and most people with relatives still living from the Depression era, an old copy of Das Kapital or experience investing in the recent dot-com era knew it was coming. They just didn't know when, sort of like living in California where the view is still too beautiful to move.
This dislocation is not unfamiliar to those of us doing business in Northern Ontario. We have lived by the exigencies of the rapid change of supply and demand most of our lives.
Recently, our forestry communities have been suffering and our mining communities prospering. In the past, it has been the reverse. There is always a recession somewhere in Northern Ontario. Now, it is fully shared.
What is so annoying this time round (and I speak as man who has owned nothing more risky than a preference share in years) is the extent of the hubris. To hear Karl Schwab, the president of the world economic forum in Davos, Switzerland bleat on about how the Investment Bankers did not take his advice on risky procedures years ago is to laugh. The investment banks bought and sold the forum annually. In his own way, he is admitting to a sponsorship scandal, of which we have some experience in Canada.
The complaint here is not just corruption, which is rampant wherever big money lives.
What is new is the lack of countervailing forces. Business people have always smugly complained about government incompetence, red tape, and regulations, but there were others who pointed out the dangers of treating all life as a market experience.
Globalization has muted the debate. If you look at what is important to us in life, we are deferring our interests to "shareholder values," not community values. When it comes to food, the drive for convenience and profit is killing us. Our kids are eating less healthy, and in a time of plenty, one of our major social problems is obesity. There is little market incentive to produce what is healthy. The investment is in unhealthy convenience.
Anyone with an aging parent knows of the drug culture that has invaded our health system. The transformation has come from international drug companies whose marketing budget matches their research budget and includes such time-honoured techniques as paying doctors to travel to exotic places to take seminars on their goods. All this before we examine the bogus research reports that allow dangerous products to come to market before they are fully tested or discarded. Their legal budget, no doubt, will match their marketing budget in due course.
Closer to home, our forestry companies are disconnected from the sustainability needs of our communities, and now of course they are disconnected from their own profitability.
Our fish companies have destroyed the sustainability of our fisheries. This stuff is all part of communities and governments abdicating responsibility for outcomes. And they are us.
Perhaps the most egregious abdication of responsibility has come from media companies.
Whether it is the low-life morning radio shows in big cities that live off titillating chatter that would have embarrassed most people 20 years ago, the utter trash on television or the addictive nature of the gaming products marketed to kids, the problem is the same. It is all driven by "shareholder values," not community values.
I believe our financial crisis is not an isolated event. It is a symptom of the saturation of one kind of thinking or, perhaps more realistically, unthinking. I believe in free enterprise and have spent my life building a business, but I do not believe in free enterprise without limit.
This crisis is the tip of the iceberg. As we lick our wounds, let's take time to think about what is wrong.
Michael Atkins
President
Laurentian Media Group
