Frank Touby: Want to get rich? Get regulated by Ottawa

By Frank Touby –

While Neocons argue that government regulation is anathema to an effective marketplace, their masters in big business find it just the other way around. Having a government-regulated oligopoly is a sure way to wealth and power for an industry.

In many ways the industry and the regulator are natural bedmates. They’re interdependent. The regulators make the industry rich, help solve its problems, and the very existence of the regulator requires there to be someone to regulate.

Take a look at the credit card oligopoly as an example. Currently they’re bucking moves to make them less gouging and they’re winning. Which means we’re losing.

Their sky-high interest rates used to be the crime of usury before effective lobbying with government regulators abolished that as a threat to the business. Now they even gouge merchants—and consumers—with their self promotions and demand the absolute right to do so.

This comes in the form of those “rewards” you get for using a specific credit card. They’re designed to entice you to use that card over a competitor’s so the card company can wager you’ll run a balance and it can collect what in simpler times would have been called vigorish (interest paid to a usurer).

Mastercard’s mouthpiece argues: “80% of Canadian consumers…enjoy their credit card rewards.” Since most merchants must accept credit card payments in order to do business these days, they’re also forced to pay higher transaction fees so the credit card companies can compete with each other in the rewards game. Federal regulators just nod and agree. How about the CRTC? Is there a bigger bonanza available anywhere than having those characters regulate you? If you’re in the cellphone oligopoly, which is kept tight and avoids meaningful competition, you’re allowed to market as almost deceptively as you wish.

They can mislead consumers with options, add-ons and mandatory accessories that most people don’t understand. The can and often do mislead with ads that promote low prices that really don’t exist.

Let’s say a cellphone company advertises a $30-a-month fee for using their company’s brain fryer. That sounds pretty decent. The convenience of having a phone in your pocket wherever you are compares favourably with the monthly rate of a wired phone.

But it’s not $30 a month. For one thing, it’s usually a minimum of $36.95 a month because some chiselers tack on a “system access fee.” That’s like the supermarket charging a “store access fee” each time you check out. Either the price is what’s stated, or it’s intentionally misleading. Tax and government-mandated fees needn’t be tallied in the price quote, but the total price the company charges should be.

Companies do it because they can, and they can because they’re regulated by the CRTC that seems to work for the industry more than for the public it’s supposed to protect.

The problem with big business and government getting together is that government is supposed to serve us all as citizens and business is supposed to serve only its own needs and wants. There’s nothing wrong with business being utterly selfish. It’s how it’s supposed to be. Look out after your shareholders is the mandate and that’s fine so long as we all understand that.

The trouble starts when government regards business as a partner in some way. Hire business, fine. But end it there. Don’t enlist them in the affairs of government. That’s the concern of citizens, not corporations.

One of the worst mistakes western society made was to permit corporations to be considered equal in rights to a human being. That unwittingly ascribes to an utterly selfish entity the traits of a normal well-intentioned person. Most people are charitable and have altruistic impulses. Corporations only do so for tax advantages or promotional purposes. So there’s really no charity there, it’s just a marketing or bookkeeping manoeuvre that is properly expected of a business in maximizing its profits.

Corporations make government dysfunctional so that it serves them instead of the citizenry for whom government exists.

As for the corporate masters, they are granted two voices. One as citizens. And one as  powerful manipulators of the government that should serve us equally.