George Rebane
Even the left-of-center Economist, “the world’s oldest newspaper”, is beginning to see the light as governments take over huge hunks of their countries’ wealth generating capacity. In its 7-13aug10 issue (‘Leviathan Inc’ and figure) it features a thorough analysis of governments worldwide grabbing control of industry after industry in a hopeless hope to stem the tide of red ink that paints their budgets. The Economist concludes that the sucking sound of disappearing American jobs “comes from the tentacles of the state, reaching into more and more areas of business in an effort to get the economy moving. It is the sound of Leviathan Inc.”
In countries where the state owns controlling interest in large and growing companies, the Economist points out that this success is not due to any state wisdom, but merely that these autocratic governments have now started loosening their grip on industry, enterprise, and profit. We, with dunce caps firmly in place, never see in the comparisons that we are heading south while they are heading north.
Here we engage in both the mega-stupid and the mini-stupid. The mortgage lending market is a poster child of the former where all the world knows the role that government guaranteed and goaded Freddie and Fannie played in getting us into the current recession. Yet our government again evinced idiocy in its latest financial reform act – it totally ignored the devastation that Fannie and Freddie caused and continues to this day. This “illustrates both the perils of state meddling (implicit state guarantees distorted the mortgage market with fatal consequences) and the difficulty of giving it up; having rescued the pair, the federal government lacks any plan to pull out.”
On the mini-stupid side of government waste we – especially in America - have the thousands of government funded non-governmental organizations (NGOs) that cover the landscape like a carpet of locusts chewing away at otherwise productive labor and cash that could have been left with its original owners. These organizations have names that are high-sounding yet suspicious upon reflection. What do they actually do to earn their keep?
Upon closer inspection, most such NGOs provide well paying jobs to people who would otherwise be unemployed or forced to accept employment in the private sector at compensation rates that more closely reflect their actual talents and industry. These NGOs are just another facet of government as the ‘employer of last resort’, even though their employees are technically not state workers. We have several of these NGOs right here in Nevada County.
An example is the local and remarkably named Sierra Business Council - “Pioneering innovative projects and approaches that foster community vitality, environmental quality, economic prosperity, and social fairness in the Sierra.” We have no idea what kind of ‘business’ SBC does or how it helps businesses. (See also Barry Pruett's blog for more on this.) From its website it’s obvious the kind of talk they have been walking, or is it the walk that they have been talking? Their blather and pabulum flows freely but not without cost. This NGO provides jobs for ten to twenty people and takes in through grants and other government transfers about $1M and change annually ($1,336,618 in 2008). Currently it is looking for interns to perform some type of ‘green inventory’ hereabouts, and also needs a “Sierra Nevada Energy Watch Program Manager”, clearly jobs that will stimulate the bejeezus out of local businesses.
Such organizations are usually politically hard polarized toward the progressive side, and led by a politically correct, ideologue-in-denial, hubris-imbued bureaucrat. Fitting the form is SBC’s chief executive Mr Steven Frisch, whose extensive business experience is a matter of record. Mr Frisch is a loud local promoter of all causes that list to port as he leads his team in projects such as ‘Green Communities’ and the ‘Sierra Nevada Carbon Cooperative’.
And dear reader, there are thousands of such wallet-sucking organizations across America led by people like our Mr Frisch, people who know from whence comes their sustenance, and it ain’t from any businesses whose bottom lines they pump. Having said all this, I wish to leave you with an uplifting thought – isn’t it marvelous that we are a country still rich enough to afford such nationwide nonsense as these established and permanent drains on our public weal?
Exit question – But for how long?
George, truer words were never written. What pains the producers among us (government has not killed us all, yet) is that these same NGO's are free to use the tax payer funded assets and titles to promote more government, more bureaucracy and most importantly their own employment (it is the same vicious cycle used by public employee unions). In private enterprise this would be called a conflict of interest or extortion. I have researched SBC enough to know that there is no there, there. To twist AB32 into a job creation law (as Mr. Frisch did in his OPINION piece) takes demagoguery, deceit, dishonesty, propaganda and a lack of integrity to a level usually reserved for the crustiest of elected politicians. Your often used "stupid or evil" exit question applies to this post too. Thanks for posting this important piece.
Posted by: Mikey McD | 09 August 2010 at 09:57 AM