So it's been a while since I posted. Changes were anticipated, but we've hit a snap with that. More on that another time. Contrary to popular (well, popular relative to my readership) belief, I was not on vacation but busy working on things for clients. I'm actually writing this while awaiting a client who is very late for his appointment.

Since my last post at the end of July, I've had a lot of things to write about, ranging from issues of foreclosures to the Olympic games to real estate fraud. While some of those things have become outdated (like the summer Olympics), other topics will be discussed in the coming posts. I may still talk about the Olympics if I can find a good segway from a future post, but I'll leave that alone for now.

The topic that is more relevant today is with the state of the market. With the government sponsored acquisition of Bear Sterns by JPMorgan Chase, the government takeover of Fannie Mae and Freddie Mac, the demise of Lehman Brothers, and today's government bail out of AIG, it makes me wonder if this spells the end of the road for free enterprise.

Effectively, the government is now calling the shots in the financial sector by telling the major banks what to do. Besides government employees, the US government is now effectively the de facto employer to all the employees of the companies it has bailed out. Since when was the government expected to be a partner in business with financial institutions?

What this also effectively does is allow financial institutions free reign to do whatever they want knowing that the government, as a safety net, will bail them out because they are so big and powerful. Have an incompetent CEO that drives the company into the ground? Government's going to bail you out. Overpaid executives with golden parachutes? Government will pick up the tab. Made bad investments? Government will effectively guarantee that you'll get your money back.

That seems to be how things are now run in North America. Think it is isolated to the US? Wrong. Borealis, a company controlled by the Ontario Teachers' Pension Plan, recently attempted to buy out Teranet, the company charged with the exclusive right to manage electronic registration of land in Ontario. One of the largest financial powers, a government sponsored, teachers' pension fund, was trying to take over a corporation with monopolistic power granted by the government. Think about how many jobs are involved in all those companies and how they are all now effectively controlled by the government.

But the Canadian government won't bail out mismanaged companies, right? Wrong again. The government has been known for giving cash bailouts to struggling automotive manufacturers like GM and Ford after they threatened to close down their plants.

So what does this teach us? You don't need to work hard or do your job particularly well because at the end of the day, the government will step in take care of you. You don't need to be responsible or manage things properly because it's everybody else's fault except yours. But it's not the government who's picking up the cost; it's the taxpayers. So every time you get your paycheck or remit your income tax, you can get that "good" feeling inside that you are helping poorly run companies remain afloat, rather than forcing them to be competitive out in the free market. So the next time your Chevy or Pontiac or Focus dies out on you on the highway, you know who's fault that is.

But where is the government when individuals and small business need help? What happened when investors lost a large part of their RRSPs to the dot-com bust? The government did nothing for them. Instead, it chose to serve special interests, like those of big financial institutions. I solidly believe that democracy in North America is nothing but a sham and that the way to win an election is to cater to special interests. Essentially, a small group of people with shared interests will be responsible for electing a government that serves their needs best but imposing that interest onto everybody else.

In increasing it's ventures, the government is becoming a larger and larger employer managing more and more businesses that used to be part of the private sector. Sounds a lot like how all the industries in Soviet Russia were run. And we all know what happened to the citizens there.

        

 

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