Among the descriptors people typically attach to the Prairies culture, entrepreneurialism belongs near the top of the list.

Over the brief histories of the three provinces, the region — particularly Alberta — has produced a remarkable list of business achievers, individuals of vision, toughness, drive and imagination. And integrity.

Glancing back across the fields of history, a terribly truncated list of standouts would have to include Calgary’s famous Big Four of the early 20th century; people such as construction and power magnates Fred Mannix and Ron Southern in the postwar period; pipeline visionary Gerry Maier in the 1970s; and, more recently, media baron and human rights crusader Izzy Asper, natural gas captain Gwyn Morgan and deal-maker extraordinaire Murray Edwards.

But the recent bust of an alleged $400-million Ponzi scheme headed by two Calgarians reminds us that the Prairies are also given to an alternative form of entrepreneurialism. Between outright scams and schemes that started off on the right side of the law but went awry under financial pressure, we’ve had our share — perhaps more than our share — of financial disasters. Is it something in the water? The cyclical pressures of a boom-and-bust economy? Or it’s sociological/religious, perhaps: a financially toxic combination of ingrained aversion to traditional eastern banks coupled with the believer’s tendency to place trust in others?

A pretty common historical narrative holds that we sodbusters are somehow predisposed to producing financial incompetents or worse — as well as suckers by the bushel to line up and hand over their money. There were times back in the 1980s when we seemed to produce a financial failure monthly. If it wasn’t a mortgage company, it was a trust company, an insurance company, an investment company. We even produced the only chartered bank failures since early in the 20th century.

But we can at least tell ourselves that, after the Bernie Madoff Ponzi scheme in New York, and Montreal’s Earl Jones debacle, the Prairies aren’t uniquely susceptible to this impulse.

Maybe we’ve even grown up, after a fashion. The two men charged in the Calgary scheme, Gary Sorenson and Milowe Brost, and their “Institute for Financial Learning” allegedly trolled throughout North America to come up with their 3,000 investors. A generation ago, a single Edmonton-based operation, the Principal Group, seduced almost 70,000 people just from within Western Canada. Principal crashed in 1987, triggering an often bitter, multimillion-dollar, two-year inquiry: the evidence tended to show that Principal’s principals had committed fraud.

But even as we on the Prairies grow a little wiser after all those financial live-fire exercises, the rest of the continent seems to be moving in the other direction. The genius, if one can call it that, of the homegrown Prairie schemes was their relative plausibility. The Principal empire was built on returns that were usually only a few points higher than those offered by the chartered banks. The pitch — that Principal was run by a homegrown genius who understood the local economy and could outperform the banks, a local boy who was eager to share the wealth — just made sense to Westerners.

Bernie Madoff, on the other hand, promised mathematically impossible returns to rich, educated people who had no excuse for such gullibility. And Sorenson and Milowe promised patently absurd returns. At a time of record-low interest rates, some people’s hankering for something better has made them weak. One sees the TV interviews with fleeced investors, and almost all cycle through the same range of expressions: haunted, indignant, bewildered. It’s infinitely sad, yet numbingly repetitious. There’s that old expression: “Fool me once, shame on you. Fool me twice, shame on me.”

What’s the punchline to “Fool me 30 times”? IE



George Koch’s articles are archived on the weblog www.drjandmrk.com.