More proof of the superiority of the private sector

Not that we need any. Everybody knows this already.

But look at the news that’s leaking out right up here in Ontario.The Liberal government, desperately trying to win votes a couple of elections ago, promised to phase out coal powered electricity, because as we all know, coal is stinky poopy bad.

The trouble with phasing out the coal power is that you’ve got to phase in something else. On that score the government was woefully unprepared. Eventually they let a contract to a couple of high school seniors who had a plan to build gas fired generating plants.

That was great. Gas is as virtuous as coal is vile. Everybody knows that.

So then another election comes along, and whoops, everything is going great except that the Oakville neighborhood where one of those plants is to be built gets a severe case of NIMBY syndrome. The locals have organized, and as fate would have it, as many as four Liberal seats are at risk because of this damned power plant.

So the government does the politically expedient thing and cancels the project.

Greg and Hubert, those school-boys with the contract, would be happy enough to disappear into the woodwork with a couple of millions of consolation money, but now we have another problem.

There was not a single bank or government or credit union or financial entity of any kind in all of Canada willing to step up and commit financing to those eager youngsters. Eventually they found it with some hedge fund sharpies south of the border.

So now, after having committed 60 million to a cancelled project, the hedge fund boys sue the Ontario government for 300 million for their lost income.

The government lawyers roll up their sleeves and play hardball. They settle for 150 million.

That’s a win-win, wouldn’t you say? Those government negotiators save the taxpayers 150 million, and the hedge boys walk away with about 120% return on their money in under a year.

So when we speak of the “superiority” of the private sector, what we’re talking about is that all the really smart guys in those MBA Finance classes at Wharton ended up at hedge funds, and the guys who came in near the bottom of their Poly-sci class at the University of Guelph are negotiating for the government.

Not only that, but all those government negotiators are hoping to leave a happy impression with the folks on the other side of the table, so that they too might someday join the hedge fund boys club.

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