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Hey Ernie, President Reagan was right!

Sesame Street
Source: Sesame Street

"The best minds are not in government. If any were, business would hire them away."

That was one of Ronald Reagan's favorite lines. He used it often in speeches before and during his presidency. Now this cherished and enduring conservative belief is being proven true by an unexpected, but very worthy source: Sesame Street!

That's because Sesame Street has just been hired away, so to speak, by HBO. The pay TV channel will now get exclusive rights to an expanded number of Sesame Street episodes and content nine months before those episodes become available back on PBS.

There's a simple reason for all of this: Sesame Street is probably the best entertainment product ever created with public funding in this country. As a Gen X'er, I was part of the first target audience for the show and I have been hooked since age two. As adult with my own children today, I still find the program funny and educational. And unlike just about everything else created by the government, the show is constantly evolving and adapting to its changing audience. These truly are the best minds in children's television, and business has noticed for years.

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The free market interest and compensation started decades ago when Sesame Street started to sell toys, books, videos, and other merchandise. "Tickle Me Elmo" came along 25 years AFTER Sesame Street material had already become a strong seller. But it was still tied to the fate of the much less financially stable PBS network for distribution. Now the free market has solved that issue and truly liberated Ernie, Bert, Big Bird, and Grover for real.

And it's important to note that HBO's deal won't just allow Sesame Street to continue what it's doing now. The extra money and freedom will result in more episodes and more content. When the consumer wants something, the free market produces more of it. The government often rations it. Big difference.

By contrast, it's educational to look at the actual government products that no one would buy the rights to control. Ineffective, overstaffed, and often obsolete bureaucracies from the Postal Service to the V.A. to the DMV don't draw much private investor interest.

Of course, private industry hires away government workers all the time. Sometimes it's because they are truly talented people. But all too often it's because businesses need to hire the very people who crafted a difficult series of government regulations to help them navigate those regulations. Another unseemly and too common scenario is when top government staffers and recently retired elected leaders are hired by private industry to lobby their friends and former colleagues. It's cronyism on steroids.

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That's not what happening here. Sesame Street has been educating kids in novel ways for 36 years, and now it's found a new way to teach everyone about how and why people and products are financially rewarded. It's one thing to teach Cookie Monster about sharing, and sharing is something our kids should learn how to do. But they should also learn that being the best at something or close to it means you should be paid accordingly. And that's even if someone else who hasn't produced something as financially valuable is not. Sesame Street has always been PBS's biggest draw and the market long ago decided it was worth big bucks.

Now, it's worth more money than even The Count could count.

Commentary by Jake Novak, supervising producer of "Power Lunch." Follow him on Twitter @jakejakeny.