7-2-06 Privatization
There are lots of arguments for smaller, more efficient government. The first one I can think of is the archetypal "government employee" feeding at the public trough. You know the type I'm talking about. You go to the local Department of Motor Vehicles to renew your driver's license and find yourself investing hours of waiting time to engage in a two minute transaction. When you drove over to the local Department of Motor Vehicles office, you passed the donut shop where seven police cruisers were parked. You had to get directed past a big hole in the road where six Highway Department guys were standing around watching one guy work, and the police officer (required by law to be there at $45/hour overtime pay) directing traffic was, instead, also watching the one guy work. Then, after waiting for at least two and a half hours for the two minute transaction at the Department of Motor Vehicles office, you finally head back home, and on the way you see that the seven police cruisers are still at the donut shop, the hole in the road is covered by a giant steel plate, all lanes are now open, no highway guys or equipment are there, but the officer on overtime is still there. Further down the road, you find the Highway Department equipment parked at the local diner.
Since you've had to take the entire day off from work just to renew your driver's license, you've also figured on stopping at the City Hall to visit the Registrar of Voters office to change your party affiliation from Republican to Democrat. When you pull into the parking lot (that was put there so people needing to do business at City Hall will have a place to park) you find that the lot is filled with late model SUV's and high end sedans with official state license plates. So you park in the nearest municipal lot a half mile away, find a spot, and get out of the car to be belted with the smell of urine. As you walk down the eight flights of stairs in this concrete nightmare (the elevator is out of order), you keep praying that nobody is lurking around the next corner to mug their next victim. Finally, emerging onto the street, you have to pass at least one panhandler with the obligatory handwritten cardboard sign ("Need Money for Alcohol Research"), and make a hasty cross to the other side of the street in order to avoid going anywhere near a drug deal next to the handful of hookers lurking nearby.
Finally, you arrive at City Hall, make your way through the building to the Registrar of Voters office, only to find it closed with a small sign saying, "Out to Lunch". You glance at your watch, see that it's 12:10, and figure they'll be back by one o'clock. So, you wander around for about an hour, then come back at 1:15. The sign is still there. You sit on the nearby bench. After another forty five minutes, the Registrar of Voters window suddenly opens from the inside. You walk over, state your business, and the clerk points to a sign next to the window that says, "Party Affiliation Changes on Friday Only".
Now, I could have just as easily opened this post with a much shorter mention of how there is a perceived level of inefficiency in government. But I wanted to drive the point home a little more graphically. Not only is there the clear evidence of inefficiency all around us, there is outright squandering of public funds, outright waste of public funds, and outright criminality in government. Every week, lately, we have a new public figure either being investigated, indicted, or sentenced.
So, we can easily say that this general idea of local, state, and federal public money being wasted through inefficiency is, indeed, an issue for the public. It's certainly a big issue for me, anyway.
There's the idea that if any of these government employees ever had to try and "make it" in the public sector, they'd probably find a job easily enough, but they'd never survive the initial probationary period of employment without being fired for, basically, not being able to produce enough of any value to be worth keeping. So, they never leave their "public service job" (what a misnomer that is!) for a private sector job, because of the benefits they've accrued... they'd never get unlimited, rolled over sick days, eight weeks of vacation, and fully funded pensions out there. And, on top of all that, they'd actually have to produce something of value.
Well, anyway... I'm sure you can understand that I'm not a fan of this situation in government. This is a problem, and there needs to be a solution. However one would want to characterize this problem, it's generally acknowledged that there's some very definite problem there.
The "bright idea" from the free market camp is "privatization".
This is where the government divests itself of various infrastructure entities and sells the operation to a profit making, private enterprise. At first blush, this idea makes me tingle all over. I can just see the goldbricks quaking in their boots! The operation and management of the Department of Motor Vehicles gets turned over to some slick, well-funded corporation. The hotshot management guys swoop in and lay everybody off to get rid of the entitlements, then hire new people at minimum wage as "customer service representatives", and the whole thing is off and running.
Like the idea?
It really gives one a sense of justice in the world, doesn't it?
Well, it's not going to have any other benefit to the public aside from this one perverted sense of revenge at the outset. After that, it's just going to all go downhill.
What it's going to evolve into is the usual corporate insanity. The infrastructure or service that the privatized business takes over will, by its very nature, demand that the product or service "make money". Instead of maintaining and/or improving the infrastructure or service, the "bottom line" will be the focus. In addition, the fees and costs will have to be increased to "make it work" on paper, so that the bottom line will yield a profit.
In my city, they "privatized" the trash collection to a small extent a few years ago. The city still maintains the collection vehicles, but now they will only collect "city bags" which cost fifty cents (at the outset). The recycling is done via a separate bin, and picked up by a private company, paid out of the proceeds from the sale of the trash bags. Within a couple years, the price of the bags doubled to a dollar. So, the groundwork has been set in place for the city to pirvatize the collection of the "city bags", as well. When that happens, we have only the increasing price of the bags to look forward to.
It's that "pay as you go" thing. On the face of it, it makes sense for the guy who generates a ton of garbage every year to pay more than the guy who only generates a quarter of a ton. It's also an "incentive" for people to generate less garbage. Unfortunately, the sustainability of this model for privatization fails to recognize that less trash equals less revenue, requiring a profit making enterprise to raise the price of the bags. This, in turn, provides even more incentive for people to generate less trash, decreasing the revenues further, and so on.
That's just a local level example. On the federal level, privatization will be much, much grander in scale.
For instance, privatization is the underlying spin in last year's SAFETEA-LU legislation...
http://www.fhwa.dot.gov/safetealu/summary.htm
...even though this hardly appears to be the case when you read that $244.1 billion has been appropriated for this ambitious "thing" that the congress passed. But it's all about privatization.
In the overview at the above link, you only have to read down to paragraph six before discovering the impact.
"Innovative finance – SAFETEA-LU makes it easier and more attractive for the private sector to participate in highway infrastructure projects, bringing new ideas and resources to the table. Innovative changes such as eligibility for private activity bonds, additional flexibility to use tolling to finance infrastructure improvements, and broader TIFIA and SIB loan policies, will all stimulate needed private investment."
So, what the interstate highway system is being opened up to is lots of government money enticement on the front end for businesses to "invest" into a privatization of various parts of the highway system, along with the carrot of letting them install toll booths and collect tolls into an undefined future!
The very next paragraph is even more disturbing.
"Congestion Relief --Tackling one of the most difficult transportation issues facing us today – congestion – SAFETEA-LU gives States more flexibility to use road pricing to manage congestion, and promotes real-time traffic management in all States to help improve transportation security and provide better information to travelers and emergency responders."
So, not only can the private companies who enter into running our interstate highways put up toll booths and collect tolls for the rest of eternity, they can ALSO use the PRICING of the tolls to "reduce congestion"!!!
THIS is what "privatization" is all about... a great opportunity for squeezing the public, ostensibly without raising taxes. Of course, we all know that taxes will continue to go up, but the "idea" is that we'll get some tax relief from privatizing various infrastructures and services. It's a cruel joke, because the fees and costs we will be paying as "customers" of the private businesses will be MORE than the tax burdens we now have. And, of course, down the road the reasons for taxes continuing to go up will be "business as usual" in the government.
Consequently, I have to conclude that the whole idea of "privatization" is merely a scam for the usual bands of robbers, thieves, and criminals in our government who will turn it into a golden goose for their cronies in business, both local and national, far removed from the idealized image of privatization, on the face of it, that attracts the public to it.
Imagine a privatized water department. Imagine a privatized police department. Imagine, if you can entertain this level of nightmare, a privatized fire department...
In the end, I would rather have to deal with the tired bureaucratic goldbricks at the Department of Motor Vehicles, I'd rather give the cops a chance to make a big fat paycheck every week by standing construction detail on overtime, and I'd rather see the Highway Department guys take two hour breaks at the local diner. In the end, I find myself espousing a truly conservative view on this whole idea of privatization... leave things the way they are, because this "privatization" alternative is much, much worse.
Since you've had to take the entire day off from work just to renew your driver's license, you've also figured on stopping at the City Hall to visit the Registrar of Voters office to change your party affiliation from Republican to Democrat. When you pull into the parking lot (that was put there so people needing to do business at City Hall will have a place to park) you find that the lot is filled with late model SUV's and high end sedans with official state license plates. So you park in the nearest municipal lot a half mile away, find a spot, and get out of the car to be belted with the smell of urine. As you walk down the eight flights of stairs in this concrete nightmare (the elevator is out of order), you keep praying that nobody is lurking around the next corner to mug their next victim. Finally, emerging onto the street, you have to pass at least one panhandler with the obligatory handwritten cardboard sign ("Need Money for Alcohol Research"), and make a hasty cross to the other side of the street in order to avoid going anywhere near a drug deal next to the handful of hookers lurking nearby.
Finally, you arrive at City Hall, make your way through the building to the Registrar of Voters office, only to find it closed with a small sign saying, "Out to Lunch". You glance at your watch, see that it's 12:10, and figure they'll be back by one o'clock. So, you wander around for about an hour, then come back at 1:15. The sign is still there. You sit on the nearby bench. After another forty five minutes, the Registrar of Voters window suddenly opens from the inside. You walk over, state your business, and the clerk points to a sign next to the window that says, "Party Affiliation Changes on Friday Only".
Now, I could have just as easily opened this post with a much shorter mention of how there is a perceived level of inefficiency in government. But I wanted to drive the point home a little more graphically. Not only is there the clear evidence of inefficiency all around us, there is outright squandering of public funds, outright waste of public funds, and outright criminality in government. Every week, lately, we have a new public figure either being investigated, indicted, or sentenced.
So, we can easily say that this general idea of local, state, and federal public money being wasted through inefficiency is, indeed, an issue for the public. It's certainly a big issue for me, anyway.
There's the idea that if any of these government employees ever had to try and "make it" in the public sector, they'd probably find a job easily enough, but they'd never survive the initial probationary period of employment without being fired for, basically, not being able to produce enough of any value to be worth keeping. So, they never leave their "public service job" (what a misnomer that is!) for a private sector job, because of the benefits they've accrued... they'd never get unlimited, rolled over sick days, eight weeks of vacation, and fully funded pensions out there. And, on top of all that, they'd actually have to produce something of value.
Well, anyway... I'm sure you can understand that I'm not a fan of this situation in government. This is a problem, and there needs to be a solution. However one would want to characterize this problem, it's generally acknowledged that there's some very definite problem there.
The "bright idea" from the free market camp is "privatization".
This is where the government divests itself of various infrastructure entities and sells the operation to a profit making, private enterprise. At first blush, this idea makes me tingle all over. I can just see the goldbricks quaking in their boots! The operation and management of the Department of Motor Vehicles gets turned over to some slick, well-funded corporation. The hotshot management guys swoop in and lay everybody off to get rid of the entitlements, then hire new people at minimum wage as "customer service representatives", and the whole thing is off and running.
Like the idea?
It really gives one a sense of justice in the world, doesn't it?
Well, it's not going to have any other benefit to the public aside from this one perverted sense of revenge at the outset. After that, it's just going to all go downhill.
What it's going to evolve into is the usual corporate insanity. The infrastructure or service that the privatized business takes over will, by its very nature, demand that the product or service "make money". Instead of maintaining and/or improving the infrastructure or service, the "bottom line" will be the focus. In addition, the fees and costs will have to be increased to "make it work" on paper, so that the bottom line will yield a profit.
In my city, they "privatized" the trash collection to a small extent a few years ago. The city still maintains the collection vehicles, but now they will only collect "city bags" which cost fifty cents (at the outset). The recycling is done via a separate bin, and picked up by a private company, paid out of the proceeds from the sale of the trash bags. Within a couple years, the price of the bags doubled to a dollar. So, the groundwork has been set in place for the city to pirvatize the collection of the "city bags", as well. When that happens, we have only the increasing price of the bags to look forward to.
It's that "pay as you go" thing. On the face of it, it makes sense for the guy who generates a ton of garbage every year to pay more than the guy who only generates a quarter of a ton. It's also an "incentive" for people to generate less garbage. Unfortunately, the sustainability of this model for privatization fails to recognize that less trash equals less revenue, requiring a profit making enterprise to raise the price of the bags. This, in turn, provides even more incentive for people to generate less trash, decreasing the revenues further, and so on.
That's just a local level example. On the federal level, privatization will be much, much grander in scale.
For instance, privatization is the underlying spin in last year's SAFETEA-LU legislation...
http://www.fhwa.dot.gov/safetealu/summary.htm
...even though this hardly appears to be the case when you read that $244.1 billion has been appropriated for this ambitious "thing" that the congress passed. But it's all about privatization.
In the overview at the above link, you only have to read down to paragraph six before discovering the impact.
"Innovative finance – SAFETEA-LU makes it easier and more attractive for the private sector to participate in highway infrastructure projects, bringing new ideas and resources to the table. Innovative changes such as eligibility for private activity bonds, additional flexibility to use tolling to finance infrastructure improvements, and broader TIFIA and SIB loan policies, will all stimulate needed private investment."
So, what the interstate highway system is being opened up to is lots of government money enticement on the front end for businesses to "invest" into a privatization of various parts of the highway system, along with the carrot of letting them install toll booths and collect tolls into an undefined future!
The very next paragraph is even more disturbing.
"Congestion Relief --Tackling one of the most difficult transportation issues facing us today – congestion – SAFETEA-LU gives States more flexibility to use road pricing to manage congestion, and promotes real-time traffic management in all States to help improve transportation security and provide better information to travelers and emergency responders."
So, not only can the private companies who enter into running our interstate highways put up toll booths and collect tolls for the rest of eternity, they can ALSO use the PRICING of the tolls to "reduce congestion"!!!
THIS is what "privatization" is all about... a great opportunity for squeezing the public, ostensibly without raising taxes. Of course, we all know that taxes will continue to go up, but the "idea" is that we'll get some tax relief from privatizing various infrastructures and services. It's a cruel joke, because the fees and costs we will be paying as "customers" of the private businesses will be MORE than the tax burdens we now have. And, of course, down the road the reasons for taxes continuing to go up will be "business as usual" in the government.
Consequently, I have to conclude that the whole idea of "privatization" is merely a scam for the usual bands of robbers, thieves, and criminals in our government who will turn it into a golden goose for their cronies in business, both local and national, far removed from the idealized image of privatization, on the face of it, that attracts the public to it.
Imagine a privatized water department. Imagine a privatized police department. Imagine, if you can entertain this level of nightmare, a privatized fire department...
In the end, I would rather have to deal with the tired bureaucratic goldbricks at the Department of Motor Vehicles, I'd rather give the cops a chance to make a big fat paycheck every week by standing construction detail on overtime, and I'd rather see the Highway Department guys take two hour breaks at the local diner. In the end, I find myself espousing a truly conservative view on this whole idea of privatization... leave things the way they are, because this "privatization" alternative is much, much worse.
posted by Jeff Barnard at 7:35 AM
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