"Computers are useless. They can only give you answers." - Pablo Picasso

Oh jeez. I get called out on my "Just gimme 5 minutes" bloviation. Damn. Ok. An attempt! (Warning: Please note the emotional-amps behind my intermediary-hatred originate from a farm upbringing, where everybody who handles the crop/food after the farm-gate is considered to be a mooch, and anyone providing inputs is a monopolist. ;-))

That said, I'm convinced enormous chunks of our GDP are being bled out of more productive use by the insertion and expansion of intermediaries. Once established, they get to call themselves "businesses" and be considered to be "wealth-creators" and such, as opposed to everyone in Government, who is automatically an unproductive leech. 

1. Take... auto insurance. I'm not sure anyone really spends much time dreaming about the fantastic features they can get in their next auto insurance policy. What they want is some sensible coverage, at not too high a rate, and the assurance that the policy will be there, post-crash. Now, I'm sure the industry has lots of babble about the benefits which private auto insurance has brought, fabulous new forms of coverage, technological wizardry, great ways they're investing my cash. 

And I believe none of it. 

Instead, I look at places like Manitoba, which has one simple public auto insurance firm (as does Sask ,BC and Quebec), and which is - perhaps surprisingly - plenty innovative, which rebates surpluses, does lots of good public education and works to reduce auto theft and such, and which, all in all, has kept rates low, coverage comprehensive, and the whole service provided simply and sustainably. (Also, people can private extended insurance if they wish.) 

To compare I need only look at my home province of Nova Scotia (which is the usual comparator to Manitoba in Canadian terms), where approx. 80% of its citizens think the entirely private auto insurance industry should be tarred and feathered. Really, it's a major election issue. Have an accident, and you're doomed. People spend a lot of money to make sure accidents are handled off the record. In Ontario, it's even worse.

Families in Canada can easily spend $500-$5000 more to cover their vehicles each year under the "competitive" systems in Ontario and Nova Scotia, for instance... the rates have become major election issues in 4 Eastern provinces... and most of the population would love the stability and low rates of the 4 public insurance systems.

I just checked 2 studies from the Consumers Association (though only 2003-04.) They found that 3 private sector comparable provinces (Alberta, Nova Scotia and NB) had AVERAGE rates, per vehicle, TWICE that of the public provinces (BC, Sask and Manitoba.) In cash terms, it's $1,000 per vehicle, per year.

For a family earning $50,000 a year, an extra $2,000 per annum for a two car family is a 4% sales tax. Seen another way, even if its just $2,000 a year, but it happens each year for, ohhhhh, 50 years... that's worth a good $100,000 over your lifetime, right? 

2. Or take... real estate agents. I mean, is there a more criminal enterprise over the last 20 years? 6-7% per transaction? For doing... what again? Now, I often used to say this out of ignorance (the way I say many things.) But as I've just bought a house, and then sold it, and spent long hours talking with my brother - a realtor - about it. 

At which point, I feel on much firmer ground in saying... kill them. All. 

My realtor was a powerhouse. She sold 100+ houses last year. She had a white sports car. Bleached blonde hair all piled up. New teeth. A deep tan. An entirely rebuilt front end. She roared around, talking about what she would do. In the end, I wrote the listing. I pitched it $40,000 higher than she thought reasonable. In the end, I found the keen one, and closed the sale.

She - and her counterpart - got $20,000 or so.

As an industry, they mislead, double deal, encourage buyers to buy too much house, and all in all, they've been an enormous part of the process of turning our homes into "real estate" - which does very bad things for our communities.

I know there are lovely people in the trade, honest ones, knowledgable ones, helpful ones. My brother, for instance. But there are also enormous numbers of double-income professional and business families in which one party is a realtor, who take in $200-$300-$400,000, for doing a pathetically small amount of work. And who have contributed mightily to the accelerating divergence of incomes in North America. Oh, and they're some of the worst blow hards in that small-c conservative world of Chambers of Commerce. 

They can be replaced by supporting and speeding the process presently underway, of people being enabled to do their own sales, of having open access to listings, and so on. Maybe it just reduces their cut from say, 7% to... I donno... 3%. But imagine Government added a 4% sales tax on every property transaction. Think there'd be some upset amongst the TeaBaggers? But I'll bet 10% of them are bloody realtors! 

Or, imagine the value of everybody's house just rose by... $10,000. Imagine that. A cheque for $10,000 landing in your hot little hand. 

Imagine if you sold 5 houses in your lifetime. $50,000. In your hand. Gimmmeeeeeee.... Whoops, sorry! Your realtor got here first! 

I'll stop there. I'm aware the bigger fish, further up the finance chain, are the real money lies. But me, I'd like to see even some of these petty bourgeois fish fry. But you know what they say....

$50,000 here and $100,000 there, and soon you're talking real money.