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.

Tuesday, July 30, 2002

In the war on terrorism, we have to rely on law enforcement authority to exercise proper discretion in performance of their duties. Just like we do in the war on drugs:

On the morning of July 23, 1999, law enforcement officers fanned out and arrested more than 10 percent of Tulia's tiny African-American population. Also arrested were a handful of whites who had relationships with blacks.


The entire operation was the work of a single police officer who claimed to have conducted an 18-month undercover operation. The arrests were made solely on the word of this officer, Tom Coleman, a white man with a wretched work history, who routinely referred to black people as "niggers" and who frequently found himself in trouble with the law.

Mr. Coleman's alleged undercover operation was ridiculous. There were no other police officers to corroborate his activities. He did not wear a wire or conduct any video surveillance. And he did not keep detailed records of his alleged drug buys. He said he sometimes wrote such important information as the names of suspects and the dates of transactions on his leg.

In trial after trial, prosecutors put Mr. Coleman on the witness stand and his uncorroborated, unsubstantiated testimony was enough to send people to prison for decades.

And if our civil authorities say that an American citizen is really an al-Qaeda terrorist, and can be imprisoned indefinitely for that with no trial whatever, who are we to question?

Sunday, July 28, 2002

In the conservative Weekly Standard, two scholars from the American Enterprise Institute argue that the prospect of further regulation, such as the bill that recently passed through Congress on stiffening up accounting standards, ruining confidence in the economy, and driving down the markets.

On Meet the Press this morning, Treasury Secretary Paul O'Neill praised the bill as a useful measure to restore confidence in the economy, and should help the markets come back (as have several Republicans in Congress).

<daffyduck cartoon="duckamuck">Is it too much to ask you to make up your minds???</daffyduck>

It's worth noting that the administration defends O'Neill as a serious and weighty character. Granting them that point, for the sake of argument, his performance in a national interview was a remarkable impression of a doddering old fool.

He started off by defending the trip to Kyrgyzstan which he famously failed to curtail during the market meltdown. He declared that trip to be essential to the war on terrorism.

When Russert got him, with difficulty, to comment on the American economy, he declared that the fundamentals are sound, offering as evidence that in the last quarter, most companies met or exceeded their earnings expectations. But the reliability of earnings reports is exactly what the recent round of scandals has called into doubt.

And he was particularly confused about his own role, persistently stating that he was not obliged to be an administration spokesman or to regularly present its position on economic issues, even after Russert played a clip of a less than smoothly articulate George W. Bush, at the time O'Neill's nomination was announced, explaining that he had been selected as someone who could speak wise words to calm the markets. He was surprised to hear that no Democrats have been invited to President Bush's upcoming economic forum in Crawford, Tex. (a statement Russert attributed to Ari Fleischer), and expressed no opinion as to whether any ought to be.

Remember, Bush's own ignorance inexperience doesn't matter, because it's balanced by the strong views, experience and wisdom of his advisors.

(Update: the transcript is up, and I misremembered --- O'Neill did get out a disjointed paragraph's worth of pro-administration soundbites before the questioning really got started.

On the other hand, I also forgot some really choice bits of tomfoolery --- particularly this exchange:

MR. RUSSERT: But your comments have been closely covered, Mr. Secretary. This is how the Associated Press dealt with it. It says, “When Wall Street reopened after being forced to shut down by the Sept. 11 terror attacks, O’Neill turned into an economic cheerleader, predicting Sept. 17 that the Dow Jones industrial average could approach all-time highs within 12 to 18 months.”

“As the stock market melted down that day, O’Neill declared, ‘The people who sold will be sorry that they did it.’ He also pooh-poohed the idea that the economy could be headed into a recession. It did.”

People track every word you say very, very closely and sometimes it has just been plain wrong.

SEC’Y O’NEILL: Well, Tim, I’d call your attention to this. Now, first of all, on the day that we re-opened the market in New York was an enormously important and emotional time. And what I said then I think is right, that the U.S. economy is second to none in the world. And that over time people who have made their bet and invested in America have been big winners, and I think that will be true going forward. So I don’t apologize for saying on the day we re-opened the market, looking down into those faces of people who had worked 22 hours a day to get our economy, our market economy, back into motion—I don’t apologize for saying this is a great economy and I’m proud to be an American. I don’t take that back.

But the comment that Russert had asked about, first and foremost, was the prediction for all-time highs on the Dow in 12 to 18 months, which would have been, oh... right about the time of the mid-term elections.

Near the beginning of the interview, as I mentioned, O'Neill expressed disbelief that anyone would care that he was on tour in the former Soviet boondocks while the markets were melting down. But towards the end, he acknowledged, in response to a direct question from Russert, that he is the administration's chief economic spokesman. Left unstated was a question central to effective performance in that role --- why should anyone believe what he says?)