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Greed, responsibility and paternalism

GB Geo-Blog

Greed, responsibility and paternalism

Jean-Marc Fournier, the Minister of Justice in the Quebec Government, has indicated that the government will “urge” financial institutions and retailers to change their lending practices and to tighten access to credit in order to avoid a “brutal” day of reckoning for Quebecers.

Mr. Fournier, who also is responsible for consumer protection, told the Journal of Quebec (published on Wednesday):

“These lenders obviously favour their own enrichment in the short term with these practices. But what happens in the long term if the indebtedness reaches a level where consumption just stops? It’s one thing to heed the economic slowdown. But it’s another to encourage overconsumption that triggers a brutal shock.”

According to Fournier, during the past 30 years household debt debt has doubled and the savings rate has declined by 80% in Quebec.

So let’s understand exactly what Fournier and his government are saying. Greedy banks and retailers are forcing innocent Quebecers to overextend themselves and this eventually will put the Quebec economy at risk. It does not seem that Fournier and his Liberal Government, “stalwarts of fiscal responsibility”, believe that Quebecers are responsible for their plight. Quebecers are just too gullible in Fournier’s view.

Shouldn’t Fournier also have criticized the advertising industry? Doesn’t this industry “prey” on the weaknesses of “innocent” consumers to persuade them to spend more and more? Shouldn’t this industry, following the “logic” of Fournier, be included as part of the evil triumvirate that is threatening the economic and social stability of Quebec?

I suspect that Fournier did not go after the advertising industry because it is largely French, and further, to do so might threaten the profitability of Quebecor’s media empire. Can’t criticize the insiders – the Francophones of Quebec. The banks and the retailers, on the other hand, are largely outsiders run by greedy Anglophones.

Fournier’s threats are another example of government paternalism. Government, especially in Quebec, knows what is best for the people since they are too overwhelmed by life or too ignorant to fully understand what they are doing. Government needs to protect the innocent. By the way, this is the same government that runs a very profitable Lotto Quebec, which paid the government a dividend of $1.3 billion in the most recent fiscal year.

Thus, according to the Charest Government, Quebecers can be responsible when it comes to gambling, but not to the rest of their household expenditures and income – an interesting hypothesis. Gambling is not a threat to the people and society of Quebec, but consumerism fueled by debt is a threat.

Instead of blaming outsiders – a common practice among all politicians – the Government of Quebec should first hold its citizens accountable. Who are the greedy ones – the people that want to live beyond their means, or the companies, including the Quebecor empire, that encourage and facilitate such lifestyles?

Among the important lessons in the financial crisis in the US was the following: Greed was widespread and everyone contributed to the fiasco in some way. Wall Street was only to happy to try to satisfy the demands of investors around the world who were looking for more yield without any commensurate increase in risk. Everyone was looking for money for nothing. Everyone was trying to get ahead.

If Quebecers save too little and borrow too much, it is largely because of their greed. They want a better lifestyle, and they do not worry about how they will pay for it. Why should they? Their paternalistic government will save them at the end of the day!

The opinions expressed in this blog are personal and do not reflect the views of either Global Brief or the Glendon School of Public and International Affairs.


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