  |
|
|
CHAPTER 15
Duels Between Lenders and Borrowers
The last business cycle in
Canada spanned about 10 years. Overinvestment have plagued Canada, the United States,
Japan, and numerous other countries. In Canada, massive overinvestments in commercial real
estate by speculators, supported by banks and trust companies, were followed by enormous
increases in non-accrual loans, record surges in bankruptcies, substantial increases in
the unemployment rate, enormous government deficits, soaring crime rates, and
destabilizing and possibly dangerous increases in personal debt. (Powerful corroborating
empirical evidence is presented in Book II.)
Bankruptcy statistics
measure economic destruction. In one form or another, each bankruptcy is a lost
economic duel between a citizen or a business, and their lenders and creditors. If
bankruptcies qualify as casualties, then Canada must have been in a state of savage economic war.
Consumer
and Business Bankruptcies. Statistics from Consumer and
Corporate Affairs Canada, for the 10-year period ended in 1995, indicate that the total
number of personal and business bankruptcies in Canada was an incredible 551,645!
Of course, bankruptcies do
not only affect the bankrupt; they can be devastating to his or her family -- the spouse
of the bankrupt, their children, and other dependents. And the devastation can go on for
years. Ironically, while over half a million economic duels were raging between Canadian citizens or businesses and their creditors,
Canada was projecting the image of a peace-loving country -- in Kuwait, in Somalia, in
Bosnia, in Haiti, in Zaire, etc. Considering that Canada is blessed with incredible
natural resources and untold wealth, and that its population is a mere 30 million, in a
geographical area greater than China and Japan combined, the implied economic kill
ratio for Canada borders on economic terror.
|
|
CREATIVE DESTRUCTION OR PREDATION?
EVIDENCE
FROM PER-CAPITA MORTALITY OF BUSINESSES IN THE U.S. AND CANADA |
 |
Plate
15-1 Empirical
Evidence of Substantial Increase in the Perniciousness of the North American Marketplace:
Per-Capita Mortality of Businesses in the U.S. (1966-1996), Canada (1966-1996), and Japan
(1980-1992) -- ComparedSources:
- Consumer
and Corporate Affairs Canada, Bankruptcy Branch (Canadian business failures); and
Statistics Canada (Canada's population).
- Economic
Report of the President, February 1997,
at 337 (Table B-32: Population by Age Group, 1929-96; total U.S. population, July 1; cited
source: Department of Commerce, Bureau of the Census), and 407 (Table B-94: Business
Formation and Business Failures, 1955-96; business failures data ending 1983 and beginning
1984 are not strictly comparable; cited sources: Department of Commerce (Bureau of
Economic Analysis) and The Dun & Bradstreet Corporation).
- International
Monetary Fund, International Financial Statistics Yearbook, XLIV-XLIVII
(1991 through 1994) and International Financial Statistics, XLVI (5)-XLIX
(6) (May 1993 through June 1996), Washington, DC: International Monetary Fund (population
data for Japan 1977-1993); and R.C. Hsu, The MIT Encyclopedia of the Japanese Economy,
Cambridge, MA: Massachusetts Institute of Technology, 1994. (Japanese business failures
for 1980-1992, at 31; cited sources: Teikoku Databank Ltd. and Nikkei Electronic Databank
System.)
[Copyright
© 1998 by MACROKNOW INC. All rights reserved.]
|
|
|
