Privatizing Public Services

The basic conservative movement has never altered its views. It has always been based on the domination of society by an aristocracy, but its approach has varied to suit the times.

Since the ascendency of Reagan conservatism, that aristocracy is increasingly measured by money and power, cementing both with a redistribution of wealth from middle class to the rich. Policy in a 21st century world embedded with democratic principles required changes in voting allegiance. With a government remake and the election of conservative allies in government, the first goal is to release any union constraints on private industry, which then leaves only public enterprise for corporate exploitation.

Probably the greatest achievement of the conservative movement — and perhaps the biggest blow to the efficacy of self-rule — has been the movement’s sweeping success in impacting the thinking of the American public. This achievement has led unwary citizens to elect champions of the elite and acquiesce in the passage of conservative programs like reduced taxes for the rich, deregulation, privatization of public-supported functions, and the need to reduce funding of human investments, this at all levels of government.

For decades, Republicans and Democrats alike have conspired in legislating reduced taxes, deregulation, tough-on-crime-initiatives, and budget cuts for human investment. These are past undertakings, which a more laissez-faire-charged culture has helped bring to fruition. Now with a wiser but divided society, most of these counterproductive changes are difficult to undo.

Still in formation as a conservative goal is a privatization crusade. Its belief system still infuses us with media waves that, in effect, fracture the common good:  messages that deride organized labor, belittle government and laud corporate leadership.

It is orchestrated through newspapers, books, canned email message chains, and conversation. We help this rote-teaching of conservative values through our daily activities, including casual conversation and ready-made anecdotes. These conservative talking points are reinforced with economic insecurities like unemployment, reduced real wages, employer’s harassment, employees working without contracts, perhaps being part of contracted labor, or even with the control of education.

How many times do you hear or experience the following, mouthed by people you depend on for work, pitched at office parties, or posed as the butt of jokes in casual conversation:

Big government is bad, and private industry is always better.

The free market is our Bible of economic freedom and growth.

We are an exceptional country, suggesting free enterprise’s dominant role.

Low taxes bring incentive and growth.

High progressive taxes kill incentive and growth.

We are a nation of makers and takers.

Don’t piss off the makers because their industry infuses us with prosperity.

Unions bring socialism.

Entitlements (by poor not corporations) breed dependency and laziness.

Such burps of thought help to color our voting preferences, impact our consumer choices and guide decision making. In practice, these biases speak for privatizing many functions of government.

Such thinking helped justify a plethora of Bush administration federal revenue giveaways to private contractors. There was a concerted effort by Dick Cheney to award no-bid contracts to his former company, Halliburton, during the Afghanistan and Iraq wars. Kellogg, Brown & Root (KBR), held by Halliburton from 1962 to 2007, was awarded one of the largest contracts (no-bid) given during the Iraq war effort for services ranging from building bases to cooking food and doing laundry.

Several hundred million dollars from past contracts is still in contention, due to KBR overcharging the government.  In fact, the Defense Contract Audit Agency found that $553 million in payments to KBR should be disallowed.  In spite of this, the Obama administration just granted them another contract worth $568 million. So far, the Obama administration has not registered waste and fraud in its contracts, but is otherwise continuing expedient Bush administration privatization programs.

Since the 1980s, both Democrats and Republicans have been convinced of privatization as a desirable trend in state and local governments, mostly in training, information services, special education, testing and facilities services, prisons, food services, health care, and consulting of all kinds, ramping up to more than nine percent of services in some states.

Education is the current hot spot in privatization, with over a trillion dollars at stake. Public school systems are decrying the effort. Meanwhile, lobbying efforts at the federal and state levels are pushing privatization with Common Core and charters schools, in some cases with ALEC, an arm of big corporations, leading the charge.

Progressives are claiming that mega corporations are now casting covetous eyes on more government service efforts. The effort to privatize social security has been an ongoing goal, most notably a plan for George W. Bush in his second term. Self-funded and with a surplus of over $2 trillion, the social security fund’s health is often questioned by compromised GOP candidates, falsely speaking bankruptcy in a few years. Most economists point out that social security is a retirement fund and not a fund for speculation. The 2008 recession saw the stock market lose over 30% of its value, which would have meant almost total devastation for social security, had it been privatized.

A cautionary tale for privatizing retirement funds resides in Chris Christie’s tampering with New Jersey (NJ) pension funds. In 2009, when Christie took office, NJ spent $125.1 million on financial management fees. After some privatization by Christie, reportedly in financial funds of campaign contributors, in 2013, the state reportedly paid $398.7 million to funding managers for financial management fees for investments underperforming most other states.

The most recent call for privatization came from Jeb Bush to provide vouchers for the Veterans Administration health care system.  In Congress, GOP budgets always seek cuts for Medicare and VA funding. The sorry state of the VA and veteran wait times has been a rallying cry for Republicans in calling for privatization measures for the VA.  For the GOP, their plaint is that efficiencies of private industry demand privatizing health care provided by government, seeming to forget private healthcare’s average of around 15% (vs. the VA and Medicare’s 5%) administrative costs now. Though Republicans push budget cuts for the VA and Medicare, wherever they can, then cite poor performance, President Obama, like George Bush before him, has a poor record on VA oversight for shorter veteran wait times.

We all know that privatization of the police and fire departments at local levels cannot work and obviously we [taxpayers] can’t directly hire mercenaries to fight wars. Certainly the federal government has hired a brand of support mercenaries in Iraq and Afghanistan, a practice continued by President Obama. Of the 10,000 in Afghanistan now, there are about 10,000 more support contractors who are paid roughly twice the pay of American soldiers. Four years ago there were about 146,000 uniformed personnel and 155,000 DOD contractors in both theaters.

Privatization can get out of hand and can get very expensive. We tend to pay whatever we have to for war, including support contractors, but we seem to give short shrift to our warriors coming back, as our VA troubles indicate.

We tend to make jokes about government inefficiencies, including, for example, postal workers, teachers, city road gangs, and the IRS. The culture of jokes doesn’t seem to include CEOs like Jamie Dimon, the CEO of JPMorgan Chase who recently oversaw a $20 billion loss at one of his banks, or the Sony executives who oversaw terrible cyber security at Sony Pictures, letting lowly North Korea take down their computer network. And we don’t criticize management of giant corporations whose consumer help lines are blights on our patience.

Do you want to govermentize Wells Fargo Bank, which now owns Wachovia, a bank which laundered drug money? Do you want to nationalize Bank of America and become a party to defrauding homeowners?

We should recognize the bias embedded in a media that has been increasingly steered to the right by conservative forces.

James Hoover is a recently retired systems engineer. He has advanced degrees in Economics and English. Prior to his aerospace career, he taught high school, and he has also taught college courses. He recently published a science fiction novel called Extraordinary Visitors and writes political columns on several websites. Read other articles by James.