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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsThe Hidden History of the Privatization of Everything
Crossposting from Good Reads
Note From The Editor
Josh Marshall
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Today TPM is kicking off a richly reported four part series on privatization and the privatization movement in the United States. Well begin later this week with a detailed look at the history of the privatization movement, particularly its ideological origins in post-New Deal America, as intellectuals who feared the growth of government searched for ways to limit its growth. Later, their work combined with that of conservative political strategists who saw privatization as a way to eliminate key political constituencies supporting government spending. By the 1980s and 1990s, these principally ideological and political projects came together with a range of corporations, some new and some old, eager for access to the business opportunities privatization had and would continue to create.
From there we will look at public-private partnerships and particular industries like the corrections industry to see how privatization works in practice. Public debate on the issue often focuses on costs and savings. Does privatization really reduce costs to tax payers or simply enrich private businesses? Our series will look closely at that issue. But we will also focus on the way privatization often limits the scope of democratic government itself - taking key public policy decisions away from democratically elected or accountable authorities and handing them over to private corporations, whose methods and practices are either hidden from public view or are actually trade secrets they own.
Part 1
How an Ideological and Political Attack on Government Became a Corporate Grab for Gold
Donald Cohen
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Rising discontent with government during the 1960s and 1970s created fertile ground for privatization advocates like Savas and Robert Poole, founder of the Reason Foundation. Not only did they see opportunity for increased contracting out, but they seized the moment to recast existing municipal practices as living proof that their ideas were correct. Local governments had considerable experience contracting for basic services. San Francisco, for example, began contracting with private companies for trash collection in 1932.
The urban fiscal crises of the 1970s offered the perfect opportunity to create a rationale for contracting out public services. Cities across the country were facing declining revenues as middle class families and manufacturing companies fled to the suburbs and Great Society welfare programs increased costs. The lengthy 1973 recession pushed cities into crisis and toward Savas solutions. Privatization was no longer only a right-wing attack on popular government services, but increasingly becoming a managerial response to tight city budgets.
By the end of the 1970s, the table was set. Cities were in fiscal crisis and a new conservative think-tank infrastructure (Reason, Cato, Heritage, ALEC, and others) that embraced privatization as a core strategy to downsize government was ready for a frontal assault.
And then a new president was elected.
underpants
(182,271 posts)Bookmarked and rec'd
JEB
(4,748 posts)NorthCarolina
(11,197 posts)KansDem
(28,498 posts)An oligarchy of the super rich who won't be happy until they're charging us for every breath of air we take.
Thanks for the links. Looking forward to reading all four parts.
appalachiablue
(41,047 posts)establishment support for decades. Altering direction requires major effort but change will and must come I believe.
K & R. Thanks for these important posts, I look forward to reading more.
Scuba
(53,475 posts)calimary
(80,693 posts)Auggie
(31,060 posts)Triana
(22,666 posts)President Clinton, the New Democrat, had warmer attitudes towards the role of government but followed the Reagan-Bush direction of smaller government.
In fact, Clinton succeeded where Reagan and Bush failed. Writing in 1997, the Heritage Foundations Ron Utt (who had been Reagans privatization czar) praised Clinton for pursuing the boldest privatization agenda put forth by any American president to date, and noted that his proposals were virtually all drawn from recommendations made in 1988 by President Reagans Commission on Privatization. In 2006 Reason Foundations Robert Poole declared that the Clinton administrations privatization successes exceeded those of Reagan.
In the first year of his administration Clinton assigned Vice President Gore to oversee a major initiative to reinvent government under the auspices of an intergovernmental task force, the National Performance Review (NPR). Clinton embraced the ideas popularized by David Osborne and Ted Gaebler, in their 1992 bestseller Reinventing Government: How the Entrepreneurial Spirit Is Transforming the Public Sector, and later on by a follow-up book by Osborne and Peter Plastrik, Banishing Bureaucracy.
The Gore initiative was about making the federal government more effective, but the idea of privatization was also baked in from the start, as it was in Osborne and Gaeblers work.
Clintons 1992 campaign promises included a plan to cut 100,000 federal jobs. Downsizing was a significant part of the plan and further baked in pressure to contract out public services and functions that still needed to be performed.
In 1995 President Clinton asked Vice President Gore and the task force to identify programs that could be reinvented, terminated, privatized, or sold. Each agency identified potential functions to privatize including the Seafood Inspection Service, the OSHA and MSHA Accreditation Process, the Office of Personnel Managements background investigations service (which became USIS, the company that performed background checks on contractors including Edward Snowden and was found to be flushing background checks to meet monthly quotas ), the DOL Penalty and Debt Collection, and the Federal Helium Program.
Perhaps Clintons most significant contribution to privatization was ideological. The NPR reports redefined government services in market terms citizens became customers of public services and competition became a guiding management principle. The NPRs final recommendations (1995) called for more competition, more privatization, an idea first articulated by Friedman and Savas, who called in 1971 for competition to reduce the monopolistic control many governments have over their customers.
rurallib
(62,342 posts)thank you so much for posting this. Can't wait for the rest of the series.
Ferreting out info on privatization with short snippets of time is near impossible.
Xyzse
(8,217 posts)It's quite substantive, and I appreciate it.
calimary
(80,693 posts)It's PIRACY. Pure and simple, and very nicely packaged, massaged, excused, and justified.
Btw - from what I've read, the infamous Powell Memo - the manifesto and road map for CONs written by Lewis Powell, as a guide to taking over the reins of power in America, was inspired by the wishes and worries of the US Chamber of Commerce.
http://reclaimdemocracy.org/powell_memo_lewis/
http://billmoyers.com/content/the-powell-memo-a-call-to-arms-for-corporations/
Kurovski
(34,655 posts)The brilliance of the simple equation is breath taking.
Ford_Prefect
(7,817 posts)Isn't business there to exploit the opportunities and resources provided by Government? Aren't corporations individuals with rights of speech and representation in Government? Isn't money the functional equivalent of corporate speech?
I'm feeling dizzy over all these new ideas and revelations. I was raised on the principle that the property of the people of The United States belonged to all the people, not merely to those who pay a licensing fee, or donate to the correct foundation or fund.
Auggie
(31,060 posts)-- Stuart Butler, Privatizing Federal Spending (1985)
That it's working makes my blood boil
MisterP
(23,730 posts)but generated a huge cultural shift that made the corporations' own victims turn to libertarianism or a debased "science"--think Elizabeth Whelan or Penn Gillette
also, Hayek said it was more moral to let a retarded kid starve to death than to tax anyone, anywhere, ever to give them the basics
nice guy
Initech
(99,909 posts)seabeckind
(1,957 posts)there's been a concerted effort to sell off much of the inherent value in the services in our society (like water and electricity) to private concerns for a one-time jolt in funding and then lease the service back from that private concern. Usually the payment made is a fraction of the actual value.
Tho not done as much at the federal level, due to the types of functions, it's rampant in the cities and states. In fact, some cities have even faced bankruptcy because of it.
Here's an older piece:
The city had leased its 36,000 meters to a private Morgan Stanley-led consortium in exchange for $1.2 billion in up-front revenue. The length of the lease: 75 years.
If the meter situation seemed like a bad deal for Chicago's parkers, it would soon become clear that it was an even worse one for the city's taxpayers.
An inspector general's report found that the deal was worth at least $974 million more than the city had gotten for it. Not only would the city never have a chance to recoup that money or reap new meter revenue for three-quarters of a century, clauses buried in the contract required it to reimburse the company for lost meter revenue. The city was billed for allowing construction of new parking garages, for handing out disabled parking placards, for closing the streets for festivals. The current bill stands at $61 million
http://www.theatlantic.com/politics/archive/2014/04/city-state-governments-privatization-contracting-backlash/361016/
seabeckind
(1,957 posts)And then there's this analysis that was done a few years back:
WASHINGTON Despite a widespread belief that contracting out services to the private sector saves the federal government money, a new study suggests just the opposite that the government actually pays more when it farms out work.
The study found that in 33 of 35 occupations, the government actually paid billions of dollars more to hire contractors than it would have cost government employees to perform comparable services. On average, the study found that contractors charged the federal government more than twice the amount it pays federal workers.
The study was conducted by the Project on Government Oversight, a nonprofit Washington group. The federal government spends about $320 billion a year on contracts for services. The POGO study looked at a subset of those contracts.
The study comes after months of criticism, mostly by Republicans, about what they see as the high cost of salaries and benefits for federal workers. The House earlier this year passed a Republican budget plan that would freeze pay grade levels and eliminate raises for five years, and cut the governments work force by 10 percent. Last year, President Obama announced a two-year salary freeze for federal workers, which Republicans said did not go far enough.
http://www.nytimes.com/2011/09/13/us/13contractor.html?_r=3
Duval
(4,280 posts)I look forward to learning more.