BUREAUCRATIC RISK

The following is from the book “The Rational Optimist” by Matt Ridley

“Economists are quick to speak of “market failures” and rightly so, but a greater threat comes from “Government Failure”. Because it is a monopoly, Government brings inefficiency and stagnation to everything it runs; Government agencies pursue the inflation of their budgets rather than the service of their customers; pressure groups form an unholy alliance with Government agencies to extract ever more money from taxpayers for their members.”

“It’s a mystery why otherwise clever people still call for the Government to run more things and assume that if it did so it would somehow be more perfect, more selfless, next time. ”

To all this I would add that a bureaucratic enterprise working with the usual outdated regulations is an impediment to business at every level; one need only to think back to his or her experiences with their local DMV or the new health care website. As an investor be wary of industries that may be hobbled by Government regulation; there will be no innovation. The tendency of congress for the last few years is too pass very broad legislation then let the bureaucrats define it. When you think about this and realize that most career bureaucrats are now unionized you should be afraid, be very afraid.