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Government BusinessLiterally. We don't know if you have noticed, dear reader, but in whichever country you may reside you will find that government–owned business are literally not your business. You have no input in them, they operate in an artificial monopoly and, worse, they are selling you goods and services which, most of the time, you actually need.

It is a fully round scam that's being gone since socialism was invented. For some bizarre reason that we still fail to understand, it would seem that key means of production must be retained in government hands in order to have a "fair" society. Yet, the products and services we obtain from these so–called companies, are more expensive, have more issues and are far more bureaucratic that any privately–own corporation would provide. So… where exactly is the "fairness" in all of this?

Well, we will tell you. It is fair for politicians and bureaucrats that can keep their useless jobs. It is fair to their salaries, which are typically above the free market rate because of massive government–union pressures. It is fair to "society" because provides a pseudo–egalitarian (i.e. everybody gets the exact same amount of any stuff) set of goods and services, whether "society" can afford it or not; whether it make sense or not; whether it is even achievable or not. But hey! It looks nice in the resume and during political campaigns, what's not to like?

The Canadian newspaper The Star reported a few days back about the appointment of TD Bank Group CEO as lead to an "advisory" council to "optimize the full value" of monopolies (alcohol and electricity) in the province of Ontario. He declared that:

"we are looking to maximize the value of our Crown corporations owned by the people of Ontario"

Oh, and what exactly does maximizing the value mean? In business terms it means extracting as much profit as possible. This indeed seems the goal since the province of Ontario is, for any intent and purpose, broke. This means prices of products sold through artificial monopolies held by the government will go up. Well, what a surprise; a government raising prices. Have you noticed how every time there is an artificial government monopoly either prices go continuously up or debt goes continuously up? Can you imagine, for example, a private company taking monumental amounts of debt and then adding this debt to the bill as an item called "Debt Retirement"? Of course not. Such a company would be instantaneously bankrupted. The competition would eat it alive. Yet, this is exactly what government-owned business do all the time.

What this means is that people will now have all the disadvantages of a monopoly not being egalitarian (which wasn't in the first place) with the ruthlessness of a private corporation operating in an artificially protected monopoly. Nice.

Ahh… but there is more:

"We are going to determine what business the government should be owing…"

Oh, so they finally saw the light will sell government's so–called companies? Well… no. That would go against politician's jobs and therefore it cannot be allowed. It would seem that "Continuing public ownership, however, remains a key priority". Got it.

However, they will find out if "Is there a better way to generate value, increase dividends or be more efficient?"

Oh… so it's back to the money thing again?

Allow us to summarize.

Ontario government broke. STOP. Need cash now. STOP. Get top notch CEO to clean-up mess. STOP. Squeeze people out of money. STOP. Keep government companies in government hands to prevent unions pissed-off. STOP. Win next election top priority. STOP.

Message received.

As we have said many times before, it is not that governments cannot run business; they indeed can. The problem is that since they cannot perform any profit and loss calculations because they operate under political and not free market considerations hence it is inevitable that they go broke because "money is no objection"… your taxpayer money, this is. This is exactly what happened to communism (see Communists Can't Count).

Then, invariably, inevitably, they hit a wall. Times change. They can't squeeze more money out of taxpayers because they are barely surviving. What do governments do then? They bail those companies out and shift their debt from corporate bonds to government bonds and the Ponzi scheme keeps going on and on and on. In other words, they do everything and anything that prevents the free market from operating and thus denying proven benefits.

Worst of all, you have no saying in it. Government business is indeed none of your business.

That's your government at work. That's any government at work. It's your decision now; proven benefits or more of the same. Your choice.

Note: please see the Glossary if you are unfamiliar with certain words.

 

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