THE MIDDLE MAN


The MIDDLEMAN is the third person typically involved in a transaction of one kind or another. In the free market system the middleman plays an important role in the facilitation of transactions between two parties. For instance, a small retailer usually purchases inventory from a middleman or wholesaler because a manufacturer will not sell directly to a retailer. There are two reasons for this system. One, the manufacturer is not setup to distribute goods to thousands of customers spread out in different geographic locations and therefore sells to wholesalers only who do the secondary distribution. Secondly, the manufacturer does not have a large geographic sales organization, this leaves him at a disadvantage. To overcome this, the manufacture hires manufactures representatives or independent sale agents to take on the sales function. These avenue of distribution and sales techniques have stood the test of time because of their efficiency.

How does this apply to government?  In the free market system, the manufacture is always alert to new ways to reach the market, new technologies, market incentives in the form of higher commissions to sales agents, computer analysis to recognize the most efficient marketing channels etc.  The government, on the other hand does not distribute its services in the same efficient manner. For instance a manufacturing company many have an overhead expense 100% of its direct manufacturing cost. Government has an overhead expense of 200% to 300% of the service it is delivering to its citizens. In other words, if private companies provided the functions that now are provided by the government the cost would exponentially be reduced.  Private companies do not have bloated administration costs, they are efficient at selling products, government is not. This has already been proven time and time again. Other examples of government inefficiency are the takeover of some states toll roads by private corporations. Other takeovers of municipal fire departments by private companies have reduced costs by 100%, not to mention the privatization of correctional institutions. The bottom line on this is the bloated payrolls of Federal, State and Local governments. Additionally, the union worker  receives pay and benefits  50% more than a worker in the private sector. Privatization is the only way to reduce these costs.

One does not have to look too far to see the inefficiencies of our postal system. The post office is a colossal failure, its systems are from the Jurassic era. They have not embraced automation, they have not embraced new methods of distribution. UPS and FEDEX have moved into their traditional markets and are profitable doing it. The post office loses over 1 billion or more every year. Our national railroad, Amtrak, is another example of a bankrupt enterprise; sell it  to a public company and it will turn a profit in a very short time. Look at our elementary and secondary education system as prime examples of failure, in most large cities only 50% of our students graduate high school. A tremendous cost in lost lives and productivity. A privatized education system can do much better, this is a fact as charter schools, private schools and parochial schools do much better. The union teachers say that it is not their fault. Then whose fault is it?

The taxpayer must hold the government responsible for this inefficient bureaucracy. Many of the departments at the state and federal level are redundant. They should be dissolved. We don't need a Federal Education department, we don't need an Energy Department, we don't need a Treasury Department, we don't need a Commerce Department, we don't need an Agriculture Department, we don't need a Transportation Department, we don't need a Small Business Department, we don't need an Interior Department,  we don't need NASA and we don't need the Tennessee Valley Authority. . Just by eliminating these departments which provide dubious services to the taxpayer, the government can downsize by 500,000 workers.  This will save the taxpayer 1/2 Trillion dollars a year. 

THE TAXPAYER NO LONGER WANTS THE GOVERNMENT TO BE THEIR MIDDLEMAN. OUR MESSAGE TO THEM, "WE CAN DO THINGS ON OUR OWN WITHOUT YOUR HELP.   GET OUT OF OUR LIVES." 

 

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