Canada is not in a depression. There are no breadlines, no hobos riding rails, no agricultural collapse, no banks closing their doors, no dustbowls, no shanty villages on the outskirts of the town. We are in a recession — a serious one, but still a recession. We’ve been in recessions before. We survived those; we can handle this one. [1]

Whether the faceless gnomes writing the above were taking direction from Coleman-Low, the PMO, or a medium in touch with Izzy’s ghost, the result was just lame. Not only are key assertions in the piece at variance with the facts, these are facts that David Dodge was at pains to explain to the Post in detailed discussions he gave shortly before he retired, and which were covered by erstwhile Financial Post scribes who have since continued to write about developments like Flaherty’s Xmas-eve bailout of the Montreal Accord — a little detail of which the Post’s editorial page writers are obviously in blissful ignorance. Haven’t they figured out that the sudden trashing of a balanced budget, and  the snuffing days later of that "non-structural" meme when the estimates went to $10s of billions, was because parliament is now on the hook for the bulk of the ABCP losses?

About those hobos … if those editorial writers had even bothered to look, they were looking in the wrong place.  Doomers will recall Professor Scott Nelson’s recent comments on the Panic of 1873.  America’s legendary hobos and bums arose largely from the not-fully-demobilized Civil War soldiers who formed a new army of the unemployed through approximately the period of the second Grant administration (1875-1879).  In that period America was suffering blow-back from the disruptive cornucopia they’d earlier sent to Europe in the form of cheap wheat (called "corn" in England) and manufactured products.  The disruptive cornucopia that teed up the Panic of 2008 was Toyota & Walmart, so the analogous army of unemployed this time around will be found principally in China.  Since the post-Cultural Revolution urban migration in China constituted the largest mass-migration in the history of humanity, our new population of returning hobos and bums should hit rural China over the next five years or so like a human hurricane.  The stress will just get the country wound up for better things, though.

Meanwhile, and as I’ve mentioned before, Obama doesn’t get to relive Grant’s second administration.  America is the reigning empire at this point, not the emerging superpower, so he gets to channel the Benjamin Disraeli ministry of 1874-80.  The next five years or so are going to get nasty, but Minerva’s Owl is revving up, and once we work our way through this Sovereign Default / Complete Collapse of the Financial World thing we can expect to enjoy a whole generation’s-worth of the long, easy sunset of Pax Americana.

Over at the Telegraph, Ambrose is a bit clued in,[2] but he’s still working off the wrong script.  And Ben is the best possible guy we could wish for to solve what’s turned out to be the wrong problem.  Fortunately, by about 2014 the real problem will have solved itself.

———–

[1]: "The sky isn’t falling", Editorial, National Post, January 24, 2009.

[2]: "Bad news: we’re back to 1931. Good news: it’s not 1933 yet", by Ambrose Evans-Pritchard, Telegraph, January 25, 2009.