Bailing out ‘banks’

It figures that Al Hogan would take a belligerent posture towards the so-called bailout of the Caisse in Shippigan. He has a commentary in today called “Why must citizens bail out ‘banks’?”.

It’s funny why he never has a commentary about why should citizens bail out Irving (the LNG project, the $250 million forestry subsidy, etc.), but bailing out the poor citizens of Northern NB that had their savings with the Caisse, those demons should be hammered – so Al infers.

But I digress.

Because I don’t know the specifics of the Caisse situation, I won’t comment directly on it. I will comment on Al’s snide remarks about bailing out banks, however and with his little “what we could have done with that $60 million musing”.

First, residents have to have confidence that their savings are protected. That is why there is deposit insurance in every developed country in the world. To let the Caisse ‘fail’ and have a run on the bank by its customers and not enough money to meet the run, would be disasterous and should never be allowed by government. Now, of course the Tory government (or any government) should have had processes and oversight in place to ensure that it never came to this. These oversight mechanisms are in place for most of the traditional banking sector in Canada. But regardless of why this happened, I will never be convinced that letting the Caisse fall was an option because it would hurt most the poorest members of that institution.

Second, Al’s commentary (or whoever wrote it) rambles on about what we could have done with that $60 million. True enough. And I suspect that everyone around that Cabinet table agonized about this. But it’s disingenuous for Al Hogan to talk like this. He who fought rabidly to get the toll taken off the Moncton-Freddy highway (why he did is quite clear) – I still remember 11 straight editions of the T&T with this story as front page news. 11. This toll highway deal which was ultimately criticized by everyone -even Volpe had regrets about it – cost the citizens of New Brunswick at least $300 million and residually millions more every year in lost toll revenues from non New Brunswickers. And Al Hogan along with the Toll Busters – were the two major influencers of this infamous Bernie Lord decision.

What could have New Brunswick done with that $300 million, Al? How about the $250 million forestry subsidy mostly to bail out your owner? What could we have done with that? How about the $50 million LNG subsidy? What could we have done with that? I suspect we could rhyme off dozens if not hundreds of examples of government spending that was capricious if not downright offensive.

But protecting New Brunswicker deposits they made in good faith -without knowing about any bad management or illegal practices – is one of the smarter things that governments can do.