Crawl Across the Ocean

Friday, February 02, 2007

Logic, We Hardly Knew Ya

Stuff like this always cracks me up - and makes me kind of sad for our society, that such transparent nonsense can pass as a serious argument:

"Public Works Minister Michael Fortier says Ottawa doesn't have the $4 billion needed to maintain its portfolio of 6.8 million square metres of office space, much of which he says is in a 'precarious' state.

Sources say the private-sector companies would renovate the buildings at their cost and make money by renting them to the government."


So the government doesn't have the necessary cash flow to pay for maintenance of it's buildings. Therefore it will sell them off and pay someone else enough money so that they can maintain the buildings. i.e. Because the government can't pay for the maintenance on the buildings, it will sell them off and pay for the maintenance on the buildings. I don't know how much clearer I can make the point of how stupid this is.

The only way that someone can afford to own an asset and you can't is because they are enough bigger than you that they can carry the necessary sunk costs and have a big enough portfolio to be more diversified than you are. But who is bigger or has a more diversified income stream than the federal government? It makes you wonder what the limits of just how dumb someone can be and still not get called on it are.

Bah.

9 Comments:

  • What Canada's new government really ought to do is sell off those notoriously expensive-to-maintain Parliament buildings -- making sure to allow foreign bidders, of course, so to keep to our NAFTA commitments -- and then rent the space back. Now that would save some money for the taxpayers. Yeah.

    By Blogger J. Kelly, at 3:48 AM  

  • shhh!

    By Blogger Declan, at 8:31 AM  

  • Government may have the pockets, but the critical point is whether government can manage real estate effectively. Government can be out-competed. When it is, it shouldn't be in the business.

    By Anonymous Anonymous, at 10:45 AM  

  • Anonymous, with that argument, no one should own their own home.

    By Anonymous Deanna, at 11:18 AM  

  • Deanna, there was actually someone ("Michael") in Calgary Grit's thread on the issue who argued exactly that - no one should buy a house, since the appreciation of the asset is (generally) exceeded by property taxes, maintenance, etc. Naturally no actual statistics or any sort of data are provided, and the rather obvious fact that maintaining or increasing the equity of an asset is certainly preferable to decades of rent or lease payments which leave you with nothing.

    Probably the most ridiculous thing is that this is actually being proposed for some of the most prominent federal buildings in Ottawa - like the Pearson building and the some of big offices in downtown Hull - what sort of moron seriously thinks that sort of real estate is going to be on the market?

    The office needs of a government are pretty stable in comparison to a bank or any other private organization. You'd think all these things would be obvious to anyone.

    By Blogger Josh Gould, at 4:29 PM  

  • This is the kind of thing conservatives just adore, even though it defies any kind of rational thought. Watch for the CPC to push this hard and fast, so no future government can ever hope to recover the lost assets, a la Ontario's 407.

    By Blogger Greg, at 5:50 PM  

  • "the critical point is whether government can manage real estate effectively."

    No it isn't, government doesn't have to manage the real estate, they just have to own it.

    "This is the kind of thing conservatives just adore, even though it defies any kind of rational thought."

    Indeed, one wonders at some point what drives people to such ideological idiocy.

    By Blogger Declan, at 6:17 PM  

  • "No it isn't, government doesn't have to manage the real estate, they just have to own it."

    Exactly! I don't understand the logic of the arguments in favour of this at all; they seem to be out of touch with reality.

    By Blogger Josh Gould, at 8:55 PM  

  • Hmm, creating a scheme that actually transfers vast sums of public money to private firms under the guise of "saving money"?

    Ah, the Nanny State Conservatives strike again!

    By Blogger Mike, at 12:09 PM  

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