Ten years and twenty pounds since I had skated with a team, or skated much at all, I still clung to a misplaced sense of superiority.
Having once worn an A on my peewee jersey, pride was a yeasty stain, difficult to wash off.
A decade of school, work, changing diapers, and sitting at a desk was evident in my pearishness. My castoff hockey gear had crossed over from nostalgic to the stuff the thrift store wouldn't take. But I wore the old tube skates, the ugly broken orange helmet, and tiny faux-leather elbow pads, just to raise eyebrows.
Me on the third line right wing, struggling to keep up, and a kid 10 years my junior to my left. His shiny CCM helmet was wasted on him.
This chirpy punk had no prefrontal cortex, but still nervously scanned the bleachers for NHL scouts.
At some point midway through a playoff game, my left-winger starts yelling at me on the bench for slacking off, at which point, my own impulse control falls out the hole in my broken helmet and I bark right back at him. No longer even talking to each another, we took our heads of steam out on the ice, and dominated the rest of the game, purely out of the heat generated by our own spat. It was a weird pivot, but it worked very well for the team.
And we became buddies, without ever having resolved the earlier debate.
The free world's left wing-right wing argument has a long history of constructive discord.
Until recently, it has managed to generate decent outcomes because at the end of the analysis, both sides knew how to press broadly in the same direction. Whatever the leaning, the economists all wanted more or less similar outcomes.
Today's right-left hyperbole is not so much characterized by differences in ideals but dysfunction as to what a conversation should even look like. Opinion leaders on either end are content to wing out for the day's most ridiculous shriek, as if indignant notoriety were more important than peace and prosperity. Insolent Muppets jockeying for a Nobel Prize.
One interesting way to get to the bottom of things is to follow the money. And by that I mean follow the private money.
In other words, study the enterprises that people are willing to freely engage in with their own funds. If information is reasonably well-dispersed, this might be a good test for the aggregate judgment of potential hurt or gain of an idea.
More specifically, since governments rely heavily on the willingness of investors to buy their public bonds (i.e. to lend them money) what are the criteria a private lender might use to evaluate the credit risk of a given political system? It's actually fairly intuitive, at least in the free world. Potential hazards of lending directly to a government, or to one of its resident businesses or individuals might include:
The risk of expropriation of assets. (Don't just think Venezuela or some other pineapple republic. Think National Energy Policy right here in Canada, 1980-1985.)
Government default of credit (measured in part by the extent of the tax burden already placed upon citizens. Higher taxation levels mean less flexibility to absorb unseen government shortfalls in the future).
Imposition of foreign exchange controls, (effectively shrinking the nation's currency, and repaying sovereign debt with devalued money).
Potential adverse effect of deteriorating economic conditions, which could result in political and social unrest.
Likelihood of excessive interference in market mechanisms - (Think of China ham-fistedly manipulating its stock markets)
Political corruption (i.e., something more than garden variety - generally in countries where government is not accountable to its citizenry, and thus more erratic, unruly.)
The jurisdiction's balance sheet. (Is it already too heavily in debt?)
Key industries within its borders (their prognosis and the impact on tax base).
This only scratches the surface. Think about the gazillions of dollars private interests lend to governments the world over at this very moment. Nobody is compelling them to lend the money. They do it because they expect it back, with interest.
The motivation to analyze the risk is enough to keep geeky economists busy for the foreseeable future. Some other risk measures include: projected and historical budget balances, budget surplus/deficit to GDP, projected revenue and expense growth/shrinkage, revenues to GDP, program expenses to GDP, revenue (tax burden) per capita, debt per capita, and on and on it goes. (If you fell asleep reading this paragraph, I just proved my point. Analysis isn't sexy.)
Economists and politicians bicker over the subtleties, but the money will simply stop flowing their way in the free world if they are too far offside on too many of the above risks.
In the circle of legitimate debate, among those with either a good read on reality, or their own skin in the game, the parameters of discussion are not nearly as wildly divergent as your newsfeed might imply. And no student protest, no Facebook rant, no Twitter tirade, or Instagram meme can change that.
Mark Ryan is an investment advisor with RBC Dominion Securities Inc. (Member - Canadian Investor Protection Fund), and these are his views, and not those of RBC Dominion Securities. This article is for information purposes only. Please consult with a professional advisor before taking any action based on information in this article. See Ryan's website at: http://dir.rbcinvestments.com/mark.ryan.
