Sunday, March 07, 2010

His Master's Voice

The Province of Ontario is having a fire sale.

Act now and get in on these amazing deals. It looks too good to be true but - it be true. The very profitable Ontario Lottery and Gaming Corporation, Ontario Power Generation, Hydro One and the Liquor Control Board of Ontario will soon be up for grabs. Each one is a cash cow - they are very profitable enterprises owned by the people of Ontario.

If it walks like a duck...

The Premier of Ontario, Dalton McGuinty, has been advised by his masters at Goldman Sachs as well as other private financial wizards to sell these lucrative assets off. While plans being discussed will see that no private shareholder will be able to buy into a majority position, there is nothing to suggest that further privatization will see that eventuality. If this thin edge of the wedge is granted the rest will be easier.

The problem is this: If the enterprises are profitable and they are owned by the taxpayers; Why should the taxpayers sell them off to private investors who will collect large sums of profit for themselves? Why not use that money to either reduce the burden on the taxpayer or use it to shore up strained infrastructure?

McGuinty is taking advice from the same people that have plunged the Western world in economic crisis through short term scheming. Millions of American workers and homeowners have been devastated by their slippery manoeuvres. These are people that operate with one thing in mind and that one thing is short term profit. They are using politicians and media to continue to convince us that Wall Street is our friend; a benevolent money wizard that knows what is best for Main Street. At this point it is insulting.

A Politician is a Politician is a Politician

McGuinty is facing an election in 2011. Potential initial investment sums on his books just prior to an election will make the McGuinty Liberals look good. And maybe that is it. Maybe that is the reason why McGuinty is selling these lucrative assets to wealthy investors. However, a move like this does raise suspicion. After all, he would not be the first politician on the take. For instance, in June 2007 it was reported here (MWC News) that BAE (weapons sellers in the UK) kicked one billion British pounds back to Saudi Prince Bandar to secure a 43 billion pound sale of weapons systems. At the time Tony Blair said that he will block an inquiry by the Serious Fraud Office to the affair because he did not want to offend the Saudis; he did not want to "damage relations" with them.

As a result of this and many other offences against the public by politicians and corporations we need to be suspicious. While we do not allege that Ontario politicians are on the take like Prince Bandar, we need to raise the possibility. It would explain a lot.

The previous Ontario Conservatives sold the lucrative Highway 407 system to private investors and the investors continue to get wealthy while Joe Main Street is paying more to drive on the private highways; as you would expect. The Conservatives also contemplated selling Hydro One but their scheme fell through.

McGuinty, like all liberals, understands that screwing the population through incremental policy decisions is far easier than exposing themselves in one fell swoop (as conservatives tend to do). In that spirit McGuinty's scheme is all about portions and complexity. Private investors will not be allowed to own majority shares and there will be limits on foreign investment - for the time being.
And it naturally follows that McGuinty believes the majority of Ontario taxpayers are morons.

The Soft Sell

According to the Toronto Star, Ontario Finance Minister Dwight Duncan admitted he was "doing what the spinmeisters call preconditioning" and said "The upcoming throne speech and budget will not announce the sale of any asset we currently own." He further stated, "We will, however, continue to examine whether our government businesses could be unleashed to provide new jobs and economic opportunity for Ontario families," and he said that there would be widespread public consultation on any such move.

Look for a careful and calculating approach to the multi-billion dollar handoff to the same people that have been advising McGuinty. Look for increases in prices for electricity, booze, and lottery tickets. Look for a substantial increase in Ontarians tax bills in the coming years.

A Time to be Cynical

As citizens we need to become more aware of the connections between politicians and private investors, especially the likes of Goldman Sachs. We have traditionally deferred to them assuming that they know best and that they will work in societies best interests. We elect politicians that are accustomed to the backrooms and lobbyists and lawyers. The idea being that if we have the best shyster representing our constituency, we will get a better deal. The bitter truth is it doesn't work that way and it never did.

We need to look inside the backroom deals between privateers and politicians and at the moment the citizens of Ontario can make a good start. We need to demand McGuinty and Goldman Sachs meetings and all meetings between our elected representatives and large scale thieves be transparent.

Considering all that has happened over the past decade, now is the time to be cynical. In fact, it always was.