Friday, August 02, 2002

Well, it hasn't been a great last few months for the watchwords of Republican economic dogma. They've preached the energy and efficiency of private business; the business headlines have been dominated instead by corporate fad-following, foolishness and fraud. They've preached that regulation harms business, only to be forced by events to pass a bill tightening up regulations in order to make business work. (And then to have Bill Clinton pop up on TV to remind them that his administration tried to tighten up accounting standards, and that one of the key figures blocking those reforms was appointed by Bush to be head of the SEC --- and incidentally, to educate them on the meaning of a word that keeps slithering out of their mouths: "responsibility").

So, you might almost not notice that in several more minor ways, another Republican dogma has also been taking it on the chin --- the effectiveness of privatized government services.

Begin with airport security --- which, as the Republicans were forced to admit in the wake of Sept. 11th, is a law enforcement function, and as such, something that even moderate libertarians will admit into the proper sphere of government. (Having brought it into government, they seem to be running it so far not much better than the failed private sector efforts --- but theirs is the party that claims to bring the virtues of business to government).

Next, consider the privatization of forest fire fighting, where the scandal isn't so much the recent fire apparently set by a privatized fire fighter trying to drum up business, as the conditions of the industry generally:

Privatizing firefighting was supposed to cut costs. But it has done nothing of the sort. Last summer, which was an "average" fire season, was the most costly on record. Nearly $700 million was spent fighting fires --- $230 million more than budgeted. The poster child for that fire season was a small blaze in Oregon called the Craggie Fire. Although burning in wilderness and no threat to people or homes, fire crews and helicopters were thrown into battle. The final bill for the 2,700-acre fire: $2.6 million, an average of $9,455 per acre. During the 2001 fire season it cost an average of $1,340 per acre to fight fires on the national forests --- 270 percent more than it did in 2000.

Even more troubling is that throwing those sorts of resources at big fires accomplishes little except the creation of a big bill. ... [If] a blaze exceeds a few hundred acres and finds the wind at its back, firefighters can only try to ... chivy the fire away from particular areas. And even that's problematic; once a big fire gets rolling, moving at 2 or 3 miles per hour across a front that's 10 or 12 miles wide, the preferred strategy is to get the hell out of the way and hope it rains.

Consider as well recent events in Washington DC, where a private contractor running a group home for the city's Child and Family Services agency seems remarkably tolerant of sexual abuse of the kids. (Alert readers will recall that the government of Florida couldn't run such a program well itself. But then again, that's a Republican administration --- in fact, a Bush administration --- and they do claim to bring the virtues of business to government).

There are several things these cases have in common besides just malfeasance by contractors. One could note, for instance, that in each case, the deal was structured so that the sole customer was government. In that kind of distorted market, the contractors actually have an incentive to learn whatever quirks of their sole customer will let them chisel out the most money with the least effort; when the customer in question is as pliant to kickbacks campaign contributions as American governments tend to be, the result is not pretty.

None of which is much of a surprise to folks in Massachusetts who lived through the Weld administration's privatization initiatives, recounted here. This study obviously takes a point of view, but the facts are straight as far as I can tell. Briefly, there was a flood of early privatization initiatives, which pretty nearly dried up when the legislature forced Weld to account for his claimed savings more honestly. And there were some interesting side trips along the way, ranging from early controversy over conditions at privatized mental hospitals, to several cases in which government workers' labor unions submitted low bids, to have them thrown out on technicalities, in favor of contractors with apparent ties to the governor.

One late case of that is particularly amusing --- the bid was thrown out because the union was offering to privatize more than the government had put up for bid; they wanted to privatize all routes run out of an entire garage, and not just the particular routes most convenient to Weld's contractor cronies. Which sort of thing isn't necessarily unusual in the larger world of business, as you can see by examining the business career of George W. Bush.

In fact, privatization of this sort, moving government services out of the realm of government proper (where government regulations like, say, FOIA, apply) can be seen, in the larger view, as one front in the greater war which Dubya's administration has been fighting with vigor for as long as he has been in office: the War on Accountability.


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