Three years ago this week, on March 10, 2000, the Nasdaq composite index, the index for the tech companies and the new economy, closed at an all time high: 5,048.62.
Most of this week it was around 1,200.
"Americans no longer expect to see the Nasdaq at 5,000 again anytime soon, if ever," the New York Times stated in an editorial last Sunday. "Not that the markets rebound is our main concern. Americans these days feel as if theyve lost far more than a few trillions in the stock market. We mourn the passing of that moment of extravagant opportunity."
Of course an awful lot has happened in the last three years: the Enron scandal, the collapse of bunch of high-tech companies, the Sept. 11 terrorist attacks and the subsequent war on terrorism. The world now stands on the verge of a new, extremely unpopular war with Iraq. It may be over very quickly, but the political and economic fallout is going to be felt for years to come.
But there was more doom and gloom in numbers south of the border this week. The U.S. Congressional Budget Offices economic forecast now projects a 10-year deficit of $1.8 trillion for the U.S. government. Two years ago the same office was projecting a 10-year surplus of $5.6 trillion.
The numbers are so large as to be almost meaningless, so let economist Paul Krugman put them into perspective: " were looking at a fiscal crisis that will drive interest rates sky-high."
World events and U.S. fiscal policy are felt far and wide, even in little resort towns in the mountains. In December of 2001 Whistler council decided to adopt a zero per cent annual adjustment formula for its 2002 budget a departure from several previous years when it adjusted upwards by the rate of inflation plus one per cent for capital projects based on a slowing economy. Council also decided to delay setting the property tax rate until April, to see how the economy fared. In justifying the delay in setting the tax rate then-councillor Dave Kirk said: "Weve had two positive weekends since (Sept. 11), U.S. Thanksgiving and Remembrance Day, but Im not convinced weve gone far enough down that road. I feel we should continue to take a very cautious approach to tax levels this year."
The municipality is obviously extending that cautious approach even further this year. Last year a preliminary budget was tabled and the annual adjustment formula determined prior to Jan. 1. This year there wont be any sign of a municipal budget until April. But there are some other ominous signs.
Last year, property assessments increased 11 per cent, on average, over the previous year. This year property assessments have increased more than 30 per cent, on average, over 2002.
The province has not seen fit to address the inequitable school tax situation in Whistler.
The municipality is committed to a number of multi-million dollar capital projects which might have been more easily absorbed in a better economy.
For local taxpayers, there may be a foreshadowing of things to come in the Lower Mainland, where Vancouver, Burnaby and Surrey, among others, are raising property taxes as the demand for services from municipal governments continues to grow.
Of course all this comes after more than a decade of cuts by senior governments in transfer payments and funding programs to municipal governments. This week the provincial government introduced the long-awaited Community Charter, which will eventually provide local governments with the opportunity to impose new taxes.
What these global events, provincial policies and local decisions will mean to the Whistler taxpayer is anyones guess right now. But that moment of extravagant opportunity seems a long time ago.