January 22, 2015
The Business Coalition
for Fair Competition (BCFC) bears the herculean burden of monitoring -- and
combating -- a toxic manifestation of the “public” sector’s mission creep. The
advocacy group recently released its list of 2014’s “top ten most egregious
examples of unfair government-sponsored competition with private enterprise,
including small business.” It’s a distressing enumeration of politicians and
bureaucrats who refuse to stick to their knitting.
In
November, the U.S. Postal Service admitted
that it had tumbled $5.5 billion into the red, its “eighth consecutive annual
net loss.” But no matter. Cliff
Clavin’s clan isn’t letting dismal books keep it from expansion plans. In
September, the Federal Times reported
that the USPS was conducting initial tests of a “concept it called ‘customized
delivery’ in which the Postal Service receives freezer bags filled with foods
or other packaged goods from sellers and delivers them to people’s homes.”
There’s a prohibition on “unfair or otherwise inappropriate competitive
advantage for the Postal Service … particularly in regard to small business
concerns,” but that didn’t stop the Postal Regulatory Commission from approving
a two-year, San Francisco-based pilot program.
There
are dozens of wonky reasons to oppose the USPS’s delivery scheme, but an online
commenter probably put it best: “Great. My milk will arrive spoiled and my
bread will be delivered to my neighbors.”
Shifting
from groceries to gasoline, last summer the City of Somerset, in
Kentucky, decided to open its own filling station. It had been selling
compressed natural gas for years, so why not branch out? One of the mayor’s
distant cousins -- a state senator -- thundered that the Somerset Fuel Center
is “nothing but a socialist movement towards government trying to solve
everyone’s problems. And government is not the answer; government’s the
problem.” (Hyperbolic, but basically accurate.) Kentucky’s chapter of the
National Federation of Independent Business pledged to lobby the state legislature
“to see if we can find relief there.”
Also
seeking succor: Hunters and wildlife-management firms in New York. In 2013, the
state awarded a “single source procurement” to the U.S. Department of
Agriculture for the eradication of feral swine. Wild piggies have invaded the
Empire State, and threaten crops. But while sportsmen are eager to solve the
problem, and invasive species are frequently handled by for-profit enterprises,
New York went with the feds. In May, an investigation by a Syracuse newspaper found
that taxpayers’ price per pig killed in 2013 was $10,694. “It shouldn’t cost
that much,” Loomacres
Wildlife Management’s said Cody Baciuska told Albany’s CBS affiliate in
July. A state assemblyman called the expense “obscene.”
To the
south, a Virginia bicycle-shop owner decried the local institution of higher
learning’s subsidized challenge. Blake Aldridge, proprietor of Bike Barn, faces a threat from
Virginia Tech’s Hokie Bike
Hub, which teaches students to do their own repairs. “When you have a
mechanic, and you start providing a service that is in competition with the
local businesses, I kind of start to think, you know, where’s the line at?”
Aldridge asked a local television station. (One of his workers was less
charitable, and accused the Hokie Bike Hub of “stealing business just flat
out.”) In a curt and dismissive defense of its enterprise, a Virginia Tech
spokesman insisted that the school was “well within boundaries of state law to
provide this service.”
In
Minnesota, a technology nonprofit was the subject of unwanted attention from
the Star Tribune. Auditors found that TIES, based
in St. Paul, “misspent millions of dollars on a headquarters renovation, mismanaged
a State Fair parking lot and had such lax financial controls it paid for
nonexistent services.” Reporter Jennifer Bjorhus learned that while almost all
of the entity’s budget “comes from member school districts, who tap the
organization for training and technology,” the “Minnesota Department of
Education … has no oversight role with TIES,” and was not “required to receive
a copy of the audit.”
In 2014,
the Federal Communications Commission sought to help “entrepreneurial”
municipalities that want to offer super-high-speed Internet. In a June blog
post, the agency’s chairman opposed state laws against “competitive community
broadband.” In response, a Chattanooga
Internet executive charged that there was “no greater hindrance to my
expansion of capital investment in my communities that I serve than the
[city’s] tax funded “competition.’”
High
costs, poor results, nepotism, sweetheart deals, an uneven playing field. When
government wanders into worlds that are inherently commercial, the shenanigans
multiply -- and accountability is often nonexistent. Read
the BCFC’s list. And keep an eye out for similar abuses in your community.
D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.
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