Big business loves to be regulated

Contrary to popular myth, big business loves the nanny state. Were it not for the nanny state large companies would have to compete all by themselves in the cruel so called free market system that they pretend exists.. Big businesses’ love of big governments has become more obvious since the financial meltdown began in mid-September. First banks and financial institutions and then the big three auto makers went cap in hand to various governments to bail themselves out of a drastic situation that was by and large of their own making.

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Their actions were really no different than the welfare recipient who, after spending all of his money on crack, goes to the government and threaten to wreak havoc unless the government forks over more of their taxpayers’ hard earned money. Corporations are no different; give us the money or the economy, not to mention your political careers will completely tank. But even in good times, large businesses love nothing more than to be told what to do by governments. Recent examples in the city of Toronto have proved this point. Toronto mayor David Miller recently announced that the city, unlike other municipalities is not able to recycle the lids of coffee cups that are currently being used in the city’s coffee shops. So he intends to mandate that other types of lids be used and since he has enough sycophants on council to pass his every wish, new lids will be a-coming. While Tim Horton’s put up a small fuss, it was interesting that none of the other coffee shop chains uttered a peep. And last week Miller, whose ignoring of the current financial crisis is breathtaking announced that beginning in June, all retailers will be forced to charge their customers five cents for every plastic bag that they hand out. The major grocery chains will get to keep the nickel but that is not the reason that the execs were all smiling after being told how they must run their businesses by the out-of-touch mayor. And their happiness is not solely because they promised to donate the nickel a bag to environmental causes in order to, they think, bring peace in our time with the environmentalist whackos. No the reason that the heads of the major grocery chains are smiling is that they just love to be regulated by the government. They can’t get enough of being told what to do and when to do it by any and all levels of government. So what is the downside to large corporations when government tells them what to do and when to do it? There isn’t any downside. If a company is forced to incur increased costs, for example in producing new lids for coffee cups, those costs are simply passed on to consumers. The extra cost of this new and improved super duper recyclable lid will not deter those who presently frequent coffee shops from having their daily fix at Timmy’s or Starbucks. More importantly, since all coffee shops would be forced to use the same type of lid, the price increases would be uniform and would therefore not affect each company’s share of the market. Not only is there no downside to these types of regulations but there is an upside. Independent coffee shops, unlike the major companies, would not be able to pass on the cost to the consumer as easily as the major chains can. And the owners of these small shops may not have the additional funds, especially in tough economic times to incur the additional costs of these lids. More importantly, the added cost of the lids as well as other governmental requirements will prohibit some people from starting a coffee shop business. Included in those who may not be able to start this type of business may be a person who with hard work and an excellent product could be the founder of the next Tim Horton’s. And this is exactly what the big companies want; less competition and government regulations give them just that. The plan to charge for plastic bags benefits large supermarket chains at the expense of smaller grocery and convenience stores which is why the small independents are complaining while the corporate elites are fighting each other to stand next to the smiling mayor. Many people who go into a convenience store and end up impulse buying will resent having to pay for a bag. Those who do a weekly shop in a large chain will either take bags with them or won’t mind paying for 10 plus bags at five cents apiece. Forcing stores to charge for plastic bags will help the giant retailers at the expense of the smaller independents. And that’s what the big boys want. These are just two examples but there are more. For those who believe that elite executives sit around during the evening, sipping Courvoisier and crying about the terrible nanny state we live in – it simply isn’t true.

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