FCPP Publications :: The Passing of the Old Guard: "One unintended consequence, like a side-ache from dancing the Twist, is that the largesse simply enervates our body politic and delays inevitable reforms. In a relatively slow-growing economy where government spending accounts for about half the total, more cash for old models prolongs the mediocrity of Mills�s �perfect calm.�
Three themes dominate the dated dance music:
Governments can produce cheaper services. The reality of vibrant markets demolishes this, the mouldiest of the tenets. Almost no one believes that governments should run supermarkets to provide cheaper food, or that politicians and bureaucrats can outperform Wal-Mart. Only primitive government accounting systems, which fail to measure real costs, preserve the illusion. Can Manitoba Health deliver cheaper MRIs than the Maples clinic? Only when you treat equipment purchases as a free good, underpay their operators and make the public wait for needed scans. Ditto for many services now delivered by our sprawling public sector, including liquor, car insurance, social services and education.
Government price controls can outguess markets. Two examples, from many. The latest statistics on Manitoba�s rent-control tragedy show higher rents in Winnipeg than in Regina or Saskatoon�both decontrolled in 1992�and a lower quality and quantity of apartments. The collateral damage: little or no residential construction in Winnipeg�s downtown, a huge missed opportunity. For more stupidity, consider the Doer government�s shenanigans with energy pricing, where clean, renewable hydro-electricity subsidizes the consumption of non-renewable natural gas. Massive equalization payments allow us to charge below-market rates for electricity and cross-subsidize energy consumption. The result: one of the world�s most energy-ineffici"