For Canada, Slow And Steady Wins Races

Fareed Zakaria has a great article on how our neighbor to the North is not financially up Sh*ts Creek like we, and the rest of the world, are.

Yes the Canadians are boring folk, playing it safe. But it seems sounds banking regulations and lack of exaggerated leverage has put them atop the World Economic Forum's healthiest banks in the world. The US is #40 and Britain is #44.

"So what accounts for the genius of the Canadians? Common sense. Over the past 15 years, as the United States and Europe loosened regulations on their financial industries, the Canadians refused to follow suit, seeing the old rules as useful shock absorbers. Canadian banks are typically leveraged at 18 to 1—compared with U.S. banks at 26 to 1 and European banks at a frightening 61 to 1. Partly this reflects Canada's more risk-averse business culture, but it is also a product of old-fashioned rules on banking."

What about the "home ownership" mantra in the US where the interest on mortgages can be deducted to boost ownership. It costs $100 billion in taxes every year. No such deduction in Canada. Home ownership in the US is 68%. It's 68.4% in Canada. Seems the tax codes that induce massive incentive for overconsumption and produce bubbles are not the answer.

The article goes on to point put quite a few Canadian Initiatives that differ from the US and how they are better. From cheaper health care to longer life expectancy, to a government that has 12 years of budget surpluses, to reasonable immigration and increased corporate investment in their country, Canada is proving, over and over, some important lessons we can learn from.

You reduce the overt greed, military lust and religion from our approach and say our "o"s funny and we're almost Canadian.

Source: Fareed Zakaria