FCIC Reports

Writing in the Financial Post, Janet Whitman asks, "What caused the financial crisis?". The Financial Crisis Inquiry Commission has issued it's report on the crisis and surprise, surprise the blame falls largely on party lines.

The Dems on the commission blame "reckless" Wall Street Bankers, the Fed and the U.S. Securities and Exchange Commission and "ethics breaches at all levels". The Republicans blame "the U.S. housing bubble, non-traditional mortgages, faulty credit ratings for investments of bundled mortgages, financial firms with too much exposure to high-risk loans, inadequate capital at some big banks, risk of big bank failures, and financial panic amid failures and near failures of Wall Street banks".

Then there's the dissenting report by Peter J. Wallison, an American Enterprise Institute fellow appointed to the FCIC by Republicans. Wallison offers another viewpoint, assigning the blame most closely to where it should be.

Mr. Wallison pins the blame squarely on U.S. government housing policies. By encouraging and supporting high-risk loans to low-income borrowers, the government inflated a massive and unmanageable bubble of bad home loans.

By 2008, fueled by the policies of the Clinton and Bush administrations, the United States had 27-million subprime and Alt-A home mortgages – representing half of all mortgages outstanding and valued at a whopping US$4.5-trillion.

The U.S. government through vehicles like the Community Reinvestment Act, Fannie and Freddie actively encouraged (forced) the nations banks to loan money to people who otherwise would never have qualified for a mortgage loan. Did bankers act "recklessly"? Probably. But because of government policies they had a lot of "troubled assets" on their hands that they had to deal with or get burned. It was a game of financial "hot potato" and it eventually collapsed.

Read the Wallison's report: http://c0182732.cdn1.cloudfiles.rackspacecloud.com/fcic_final_report_wallison_dissent.pdf

CFLs disappoint

"Green" states like California are finding out that compact fluorescent lamps are not all they were cracked up to be.

It was all flowers and roses when the state of California launched its $548M USD program to help promote consumer use of compact fluorescent lamps. Manufacturers and utilities were onboard because they received bonus pay to enact rebate programs. Citizens were happy as they received cheap CFL bulbs, which promised to save them money on power expenses. And the politicians were happy, as they looked sufficiently "green" to satisfy the eco-minded voters.

Now that utopian vision of futuristic lighting has dissolved into rancor and disappointment. A multi-million dollar program by the state designed to evaluate the actual results has concluded that energy savings were not as good as expected and that utilities were being over-rewarded for their performance.

Emphasis added. Unfortunately, Ontario is unwilling to see the failures of other jurisdictions in the so called "green economy". It's full steam ahead here with CFLs, wind and solar power - all unaffordable and unsustainable without heavy subsidies from taxpayers.

Stupid. Reckless. Incompetent.

What word captures the way Dalton McGuinty’s government has blown it when it comes to windmills and green energy?

For the answer just read this post by Christina Blizzard in the Toronto Sun.

Rex Murphy

offers his unique Newfoundlander's insight on the People's Republic:

We are apologizing ourselves into impotence and irrelevancy over many of our greatest successes, while more confident — even ruthless — powers such as China are emerging brisk with the determination to develop as fast and as far as they can.

Maxime Bernier for smaller government