25 May 2011

Dundernomics 101: how to lose money

In the House of Assembly on Tuesday, Premier Kathy Dunderdale displayed her keen insight into the intricacies of public finance and economics:

We are in the open market and in the spot market and sometimes we sell high and sometimes we sell low. What we need to ensure, Mr. Speaker, is that on average we are doing as well or better than we were selling the power to Hydro-Qu├ębec, which has always been their plan.

Ummm.

Yeah.

Well, no.

Not unless you are a complete moron, of course.

There’s just no polite way to say it.

The important thing is to make sure the price you get for the power is averaging more than the cost of producing the power in the first place. 

If the power costs a dollar to make and you are selling in any market – the spot market or to Hydro-Quebec  - for less than a dollar you are losing money.

Losing money is a bad thing at the best of times.  If you are talking about losing billions and billions and billions of oil dollars that belong not to you but to the poor benighted people of Flower Hill and Flower’s Cove then it is something way out beyond the baddest sort of bad that there is. 

And if you are talking that sort of complete shite with the legacy of Sprung and Churchill Falls and all the other bad ideas borne of the same sorts of fundamental ignorance you just displayed, then you should not be allowed to balance your own personal cheque-book let alone run the province. 

It is that frickin’ simple.

- srbp -