Selling The Crown Jewels

March 11, 2010

What’s with our politicians lately and their hell bent determination to sell off the proverbial farm? Is it something in the water (publicly owned, for now) they’re drinking? First, mayoral candidate Rocco Rossi made divesting the city of Toronto Hydro a major plank in his campaign platform. His main rival, George Smitherman, has slowly come round to a similar way of thinking.

Now the provincial government has been pondering aloud thoughts of unloading such assets as Hydro One, OLG and the LCBO. While putting nothing on the table in the immediate future, the government has hired a couple investment banks including — wait for it, wait for it — Goldman Sachs to assess the worth of a proposed super Crown corporation, bits of which could be sold off to private hands in an attempt to “monetize public assets” and “unleash” an economic jolt to the economy. Colour me unimpressed because I smell a big steaming pile of panic in this approach.

Didn’t we just undergo about 18 months or so of near economic calamity followed by a present recovery that is robust only in its anemia? All but the most hardcore Milton Friedmaniacs should have no trouble with governments carrying a debt load as result of keeping the economy and vulnerable citizens afloat during such harsh economic times. And frankly, why anybody would be listening to anyone touting Milton Friedman tinged views after their healthy contribution to the recent financial fiasco is beyond me. The acolytes of Milton Friedman should still be silent with embarrassment.

Maybe if I could find a single unqualified example of a government being well served by a one time sale of a public asset, I’d be more open to the concept. Proponents hail the leasing last February of Chicago parking meters for the $1.2 billion dollars it netted the city. Yet within a month, problems arose with price hikes, bad maintenance and no public accountability (read all about at theexpiredmeter.com) and for the next 75 years, the money paid for parking at meters in Chicago will go directly into private hands instead of the public purse.

And this is cited as an example of a good deal by pro-privateers. Let’s not even bring up our provincial government’s 99 year “lease” agreement of the 407 toll road back in 1999. For me, a public sale of assets inevitably amounts to nothing short of a public fleecing.

I’m no economist but the selling of public assets just doesn’t make in any sense. If an asset is worth something and by that I mean it generates revenue, why sell it? If an asset doesn’t generate revenue, who wants to buy it? And if the asset in question is a public utility? Well that’s a non-starter. Society cannot be well served by placing public utilities into private hands.

Yet here we are once more with a government in power, facing a looming election and an ugly looking bottom line. Short term thinking holds sway. Hawk the public wares, pay down the debt and declare your fiscal prudence. Pay no attention to the revenue stream that ceases to flow into government coffers. The next time a crisis arises (and in the boom and bust economy we embrace, there will always be another crisis), we’ll just auction off another asset. That is, of course, if there’s anything left to sell.

But just for a moment, how be we try thinking outside the privatization box? What about instead of selling off, say, the LCBO for a single cash grab that we’ll never have access to again, we impose a twenty-five cent tax on every bottle of intoxicant purchased and dedicate it solely to lowering the debt? Drink Down the Deficit®™©, we’ll call it. When things are back under control, we rescind the tax?

Fuck that. If things are so dire that we’re actually contemplating the sheer stupidity of selling off money making enterprises, levy a buck a bottle at the LCOB and two bucks a square at the Beer Store. Yes, it’s regressive and we’re piling the debt load onto the backs of those who can least afford it but if we’re being truthful about the matter, we’re doing the same thing by selling off cash cow Crown corporations. It just simply delays the inevitable.

As an imbibing enthusiast, I will happily pay more for the privilege of the tipple knowing that the money is going toward deficit reduction rather than into the pockets of the vultures who are greedily circling the body politic. In fact, I will consider it my patriotic duty to up my consumption of alcoholic beverages and do my part in slaying the deficit dragon. Let us raise multiple glasses to the health of the commonweal.

Chin, chin.

soberly submitted by Cityslikr