Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.2 9/18/84; site watmum.UUCP Path: utzoo!watmath!water!watmum!cdshaw From: cdshaw@watmum.UUCP (Chris Shaw) Newsgroups: can.politics Subject: Re: Nationalization/Crown Corps. Message-ID: <183@watmum.UUCP> Date: Sat, 29-Jun-85 06:32:34 EDT Article-I.D.: watmum.183 Posted: Sat Jun 29 06:32:34 1985 Date-Received: Sat, 29-Jun-85 23:41:38 EDT References: <1121@ubc-cs.UUCP> <1110@mnetor.UUCP> <720@utcs.UUCP> <1114@mnetor.UUCP> Reply-To: cdshaw@watmum.UUCP (Chris Shaw) Distribution: can Organization: U of Waterloo, Ontario Lines: 41 In article <1114@mnetor.UUCP> fred@mnetor.UUCP (Fred Williams) writes: > Governments always seem to have trouble making a profit. It is too >easy to simply "bail-out" anyone in trouble, or keep an outright >subsidy feeding the crown corp. as is the case for Petro-Can. Actually, I have some experience which relates to this issue. A year ago, some friends and I started a high-tech firm. We used our own equipment and one of the friends' father's money. Things being what they were, we ran out of cash, so we went to the Gov't of Ontario for some financial assistance. We went to the "bailout-for anyone in trouble" section and said that we were out of cash. We brought in a presentation about our product (we had a prototype but no product to actually sell). They were impressed (in fact they were very enthusiastic about the product), and they informed us that we weren't going to fail. However, they WOULDN'T give us any handouts, since it was clear to them that we would succeed, and we didn't need help. To some small degree, the guy was right, but we WERE in financial trouble, and all we wanted was to not be in hock to the bank. The gov't isn't in the bank-surrogate business, though. They (as a matter of policy) are in the charity business when it comes to helping companies with handouts. Why? Because it's the politically safe & sage thing to do. After all, what had we to lose? Nothing but control of the company that we owned if we went to venture capitalists. If we went to a bank (the unadventurous capitalists), we might lose control later, and we'd certainly pay thru the nose in interest. If we failed, we could still put the results on a resume and get a related job anywhere. (which is what I had to do because a later cash squeeze meant I wasn't going to get paid). On the other hand, if some large industrial company goes belly-up, there's a large political price to pay in lost jobs, etc. Thus you end up with the surreal logic of "no we won't give you money, because you will succeed anyway". The phrase they used which sticks in my mind was "come to us when you've been refused by three banks". >Cheers, Fred Williams Hill Street Blues, Chris Shaw watmath!watmum!cdshaw or cdshaw@watmath University of Waterloo I was walking down the street one day, when suddenly... by baloney melted !