A Call For Less Bureaucracy and More Private Enterprise

New US Government Employees
Republicans in the US claim to be fighting for a reduction in the US deficit. As part of this initiative, they claim that included in the Obama recovery funding was the hiring of 250,000 new government employees, whose function is to regulate and oversee business, financial, medical and other aspects of the economy.

Republicans wish to downsize the government and to rid society of these armies of regulators and overseers

Canadian Government Employees
The Prime Minister of Canada Stephen Harper is also addressing the issue somewhat in that he has recently announced a general reduction the number of government employees over the current term of his administration. It is quite interesting that in spite of all of the nastiness of our politics, and the smear campaigning by opposition parties about the supposed secret agendas of Stephen Harper, every move of the Conservative government has been for the overall benefit of Canadians. The point here is that Harper recognizes the inefficiencies of civil servants.

Modern Instant Communications
In the USA, in part Republicans are correct. There is an effect rarely discussed of modern instant communications. As financial or other events occur, people everywhere are almost instantly aware of any news.

Thus when an issue arises with pensions, or financial actions of traders, or bankers overextending, or airline pilots striking, the news of the event and more importantly, the views of multitudes of commentators on the effects, background, etc of the event, are in our faces – instantly.

Effect & Result of Instant Communications
The first result of this, is that unlike when people heard of a financial event decades ago & they felt the event was far away and they were powerless to effect matters, now waves of opinion and comment roll across us instantly. Nothing is far away anymore, and we are able to influence everything.

We fail to realize the power and effect of these instant communications and emotional reactions. We turn to historical modes of dealing with these issues – we wrongly still call on government to do the right thing. Sounds good – government employees working for the common good, institute procedures, paperwork, and administration to deal with the matter and ensure that the abuse does not re-occur.

First – The Problem
There is a basic old fashioned belief here – that is the belief that government can oversee the economy and ensure that fairness, goodness and mercy are applied in equal measure over all aspects of capitalists’ actions.

The Unseen Problem With Government Employees
Study after study has shown that government oversight is fraught with administrative matters. Government employees receive better pensions that the average worker. Government workers receive shorter working hours, better vacation, better benefits that the average worker. Government workers do not wish to lose their jobs. There is little incentive to do anything except avoid criticism.

The “Cover-Your-Ass” Syndrome
The effect is a colossal ‘cover-your-ass’ syndrome. For every new rule or administration, think for a moment what has to be created:
• civil servants must be hired to create the program
• a task force must be established to properly determine the program, its intent, and how it is to be administered
• manuals and procedures must be written, maintained, updated, and interpreted. -takes a lot of people to do all of of this work
• people must be hired to administer the created program
• reports must be generated on every action so that hindsighters can review or criticize, so that government can defend itself
• supervisors must be hired to supervise
• employee performance must be judged and reported
• employee reports must be reviewed
• action must be taken to ensure the public adheres to the rules of the new program. This entails inspectors, reports by inspectors, review of those reports, decisions based on those reports, written reports rationalizing why actions were to be taken, and so on

I will stop now or else this blog would have thousands of words, but think about the process – the enforcement, the reports, the prosecutions, the administration, the boxes and computer disks full of reports, and on and on.

Every New Rule, Law and Interpretation is Here Forever
Finally, consider the absence of “sunset” provisions of this new set of rules, laws and interpretations. There are rarely if any sunset provisions. This means that every new rule, with all the new employees, supervisors, administrators, enforcers, overseers, and all the resulting paperwork, lives on forever.

I have not bothered to discuss the costs of the permanent pensions of all of these new people, the employee rights, the costs of terminations (if any), the vacations, the social benefits, and interestingly, the additional growth to the Unions covering the employees of the government.

It is quite easy for anyone to see a wrong and as a result call for the government to do something about that wrong.

The True Cost
It is quite another thing to take a moment and realize the effect. What society fails to do is to measure the true cost and benefit of calls on the government to do something.

The true cost of this government action is so staggeringly high, that if the person calling for government action were presented with a true calculation of cost, he/she might gulp in astonishment, and withdraw their request.

The Obvious Solution
Take a moment and examine our social networking. Capitalism is supposed to work on the basis of giving capitalists the right to pursue wealth and status legally and to be impeded only to the extent that their efforts harm society at large. This means that crooks that break basic laws are punished, that courts can address wrongs done to others, that the rule of law prevails.

These checks and balances are essential
For most matters however, our current social networking can easily take care of the problem, When BP dumped oil in the Gulf of Mexico, everyone had an opinion and the pressure on BP rose exponentially. They were forced to react or face dramatic consequences economically.

The ability to make every consumer and every voter immediately aware of any and all wrongs is a very powerful tool. It can replace many of the outdated, expensive and illogical laws and administrative matters now handled by the government.

After all, the the government is supposedly a reflection of the will of the people. Social media is a far more efficient manner of gauging and administering that will.

Those 250,000 bureacrats hired by the Obama administration in the interests, of healthcare, the environment, financial stability and so on, should be discharged. We finally have the means at hand to effectively let democracy and social awareness run our society.

Let’s stop building bureaucracies and instead build great and wealthy societies

By Larry Cyna

Mr. Cyna is an accomplished investor in the Canadian public markets for over 20 years, and has managed significant portfolios. He is a financing specialist for private and public companies, and has expertise in real estate and debt obligations. He has assisted private companies accessing the public markets, has been a founding director of public companies and continues as a strategic consultant to selected clientele. He is and has been a director, a senior officer and on the Advisory Board of a number of TSX and TSXV public companies in the mining, resource, technology and telecommunications sectors, and the Founding Director of two CPC’s with qualifying transactions in mining and minerals. He was an honorary director of the Rotman School of Management MBA IMC program, has completed the Canadian Securities Institute Canadian Securities Course & Institute Conduct and Practices Handbook Course, was a former Manager under contract to an Investment Manager at BMO Nesbitt Burns, a roster mediator under the Ontario Mandatory Mediation Program, Toronto, a member of the Institute of Corporate Directors of Ontario, a member of the Upper Canada Dispute Resolution Group, and the Ontario Bar Association, Alternate Dispute Resolution section. He obtained his designation as a Chartered Accountant in Ontario in 1971 and was the recipient of the Founder’s Prize for academic achievement together with a cash reward. He became a CPA in the State of Illinois, USA in 1999 under IQEX with a grade of 92%. He is a Member of the Institute of Chartered Accountants of Ontario and the Canadian Institute of Chartered Accountants. He holds certificates in Advanced ADR & in Civil Justice in Ontario, Faculty of Law, University of Windsor, certificate in Dispute Resolution from the Ontario Institute of Chartered Accountants. Previous accomplishments are Manager of Cymor Risk Consultants LP specializing in Risk Management Assessment; CEO of Cyna & Associates specializing in mediation and ADR; Founder & Senior Partner of Cyna & Co, Chartered Accountants, a fully licensed and accredited public accountancy firm with international affiliations; and was a partner in a large public accountancy firm. Mr. Cyna is well known in the Canadian Investing community. He is invited to, and attends presentations given by public companies usually 3 or 4 times each week. These presentations are intended by the various hosting companies to present their inside story to sophisticated parties and Investment Managers for the purpose of attracting funding, or of making parties more interested in acquiring shares of those companies. Being a part of this keeps Mr. Cyna deeply involved in the current market and leads to numerous investment opportunities.

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