In 1986, finance guru Larry Fink was a rising star. Throughout his career, he'd added $1 billion to his bank's profits and helped build the U.S. mortgage-backed security market. Promotions came easily until a miscalculation brought everything to a dramatic halt. He lost $100 million in a single year.
That devastating experience changed the way Larry Fink looked at money. He realized that to succeed, he would need a long-term vision that paid close attention to the economy's evolution and its risks. Now, 28 years later, BlackRock is the world's largest asset manager and manages assets worth $5.1 trillion.
B.C. Premier Christy Clark , July 25, 2012. (Photo: Adam Scotti/Reuters)
In early 2016, Fink sent a very alarming letter to CEOs across the world.
That letter called out the dangers of what he described as "short-termism," and it is exactly how companies put themselves at risk. After Fink's letter, Harvard Business Review also hit back at company short-termism, Business Insider called it a disease, and two Columbia Business Professors outlined clearly how corporate short-termism cripples long-term profits.
Companies often support this practice until devastating consequences emerge. Boards are responsible for keeping a company alive. Once it becomes clear that a CEO's short-termism is moving a company towards disaster, management will step in and fire the CEO.
No, jobs aren't safe under the Liberals.
At this point, if Christy Clark was a CEO, she would have been fired. Risking our financial future for short-sighted PR tactics has cost B.C. billions of dollars, and taxpayers foot the bill. Despite her heavy PR spins about jobs, her tactics, in reality, have produced lower wages, focused on dying sectors and delayed core infrastructure and maintenance to the point that affordable housing and our schools are crumbling.
So, what has Christy Clark done?
B.C. wage growth has continued to lag. B.C.'s household income ranks seventh across Canada, significantly below the national average. Metro Vancouver falls even lower on the income scales, despite our astronomical housing expenses. B.C.'s job market faces high rates of part-time work and underemployment, which skews unemployment ratings. B.C.'s household debt has also surpassed the average debt held by American households during the 2008 recession. No, jobs aren't safe under the Liberals. No, money isn't good under the Liberals. Yes, taxpayers have suffered and are in crisis.
Clark's last election campaign focused on jobs and the LNG industry, but that never materialized. After years of cancelled projects and the loss of a major Fortis deal, B.C. has lost its LNG investment money.
(Photo: Ben Nelms/Bloomberg via Getty Images)
After Clark's LNG failure, she foolishly focused her hopes on B.C.'s out-of-control real-estate market. Her desperation for any sign of economic growth led her to mute the voices of citizens raising the alarm about prices and affordability until it finally boiled over into protest rallies and dominated the news media last year.
Property transfer taxes doubled to $2.2 billion in a single year, which filled tax coffers and enabled her to balance budgets. It also wound up costing an average of $463 for every single person in this province. The hundreds of thousands of dollars added to new mortgages put not just detached homes, but also condo ownership, out of reach for many young families. For two years, economists and housing agencies have warned about the bubble. Clark's reliance on real estate made us and our government deeply vulnerable in the face of a crash. A simple rise in interest rates could send many families tumbling into bankruptcy.
To make matters worse, Clark failed to meet spending targets in affordable housing when development was cheap and money went much farther than it does today. She dropped funding by $287 million and missed a major opportunity to breathe life into the affordable housing sector.
Affordable housing fell into deep crisis, development costs rose, existing units fell into disrepair and her $500-million affordable housing announcement last year -- which came only as a result of tremendous public outcry -- came far too late. Had she invested that money earlier, she could have reduced the costs by as much as 40 per cent and multiplied the number of units currently slated to come to market. We are now in full-blown crisis, and that money is a simply a drop in the bucket.
To balance the 2013/2014 budget, Clark sold 150 hectares of land to a major political donor at $43 million below its appraised value. She also drained a whopping $1.7 billion from ICBC and BC Hydro and then tried to distract the news of a 42 per cent ICBC increase by ending luxury car coverage. Rates are rising because her hand was in the cookie jar.
It's about enabling B.C. to thrive and be a sound, stable economic leader in the long run.
She also froze education spending as schools fell into disrepair, forced a deal with B.C. teachers that was ruled illegal, sold up to 10 per cent of B.C. seniors' residential beds to a Chinese insurance firm, and awarded $15 billion to her top 177 donors -- companies that donated $56 million to the B.C. Liberal Party.
To top it all off, Clark took a massive $9-billion gamble on Site C. The oil and gas industry can't support it, and B.C.'s energy demand is currently flat. Top executives have publicly admitted that Site C won't pay for itself. Add hefty U.S. competition from Trump's cheap and dirty energy, and Site C proves a massive financial disaster. B.C. residents will subsidize those costs for a lifetime. Clark has mortgaged our future and handicapped this province's ability to thrive through short-sighted, PR-driven decision making.
For all of Clark's positive economic messaging about saving money, her actual management is incompetent and has added tremendous costs -- and risk -- to us as taxpayers. She would never survive as a CEO. Budgets must include careful planning and risk assessment. She failed on all counts. For us to thrive, it's not just about the short term. It's about enabling B.C. to thrive and be a sound, stable economic leader in the long run.
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