Thursday, July 16, 2009

When Will Privatization of Government STOP?

By Paul K. Haeder

It’s an interesting news day, with word that more people have been killed in Iraq, and that July is becoming the month where more foreign “troops” have been killed in Afghanistan since the invasion started there. Then the headlines about this "smart Latina" being grilled by the politicians about her stances on many issues, including abortion.

In Spokane, we have had a landmark City Council vote, 5-2, allowing a Community Bill of Rights to go on the ballot in November for Spokane residents to vote upon. In short, it’s a measure that has been propelled for two years, with hundreds of volunteers and dozens of meetings to frame the issue of community rule and working on our Growth Management Act and the Comprehensive Plan to plan for the environment, fair housing, sane transportation, and the rights of citizens to determine the present and future face of neighborhoods. It’s a large platform of issues that will help get citizens involved in neighborhood planning and holding City and County governments accountable for some of the past and proposed measures that have helped to create a very thin safety net or none at all in terms of preparing for climate change, economic tsunamis, food security, peak oil, and delivering basic services for the health, safety and well being of the community.

As of 4:00 on Wednesday, July 15th, the Community Bill of Rights has qualified for the November, 2009 ballot!

"A tremendous amount of citizen effort went into bringing the Community Bill of Rights to this point. Passing the threshold of qualification now means Spokane will have an unique opportunity - come November - to a set a course on how their city navigates economic, environmental, and social issues and who is going to be involved in those decisions ," said Kai Huschke - campaign director for Envision Spokane.

This blog today will quickly introduce this idea of privatization of government services not working so well; about how conservatives have negatively framed public service and government agencies; and how we are at a crossroads in areas like single-payer health care, whether we will have a federal government there to assist states to prepare for a half century of wildfires, hurricanes, climate change disasters, desertification, brownouts and blackouts, and a wavering transportation system and whether we actually kick in a green collar economy.

We need members of boards to read Thomas Frank’s book, The Wrecking Crew, in order to understand that we are at a place in history where two major schools of thought are at loggerheads: we need a stronger public education system, K-12, Community Colleges, State land grant schools; we need more public servants, experts in biology, planners, green technologists, economic development wonks, healthcare aficionados, and on and on; we need better control over the continued monopolization of money, on top of the fact that we need REAL tax reform that is equitable ---- VERSUS ---- those that see privatization of the end all of everything, as the key to economic and ecological "salvation," the key to running the engine of prosperity into high gear for a vibrant economy and great culture. Do we want community colleges to succeed, or do we want University of Phoenix to kill public education? Do we want public schools to have oversight of what kids eat and drink, or do we give private food contractors control of our children’s diets and health? Can a coal company really decide the fate of mountains and streams and lives in Appalachia, or do we need more college-trained public servants and government experts to have the tools to mitigate and stop this sort of environmental and cultural degradation?

As one blogger with toes in many pools of water – environmentalism, print journalism, radio, sustainability, agriculture, education, the arts, community activism, planning, land use, blogging, philosophy, narrative framing, and citizenship in the USA and globe – it’s obvious that privatizing is not the way to go. Here’s Jim Hightower’s report today on what happened in Indiana when the governor gave IBM carte blanche to run roughshod over the state’s so-called “welfare” system. Man, wouldn’t it be cool if the media continually called the Goldman Sachs, Bank sof America and Wall Street cronies and their government payoffs as Corporate Welfare, the so-called welfare system for the rich? In any case, read Jim Hightower’s words, broadcast on many radio stations across the USA. Then, read the Indianapolis Star’s bit on the same story.

Finally, Thomas Frank’s words in a Salon interview, and then his own Op-ed in the Wall Street Journal, a purveyor of corporate welfare if there ever was one.

Why the harangue today about corporate welfare? It’s obvious that we need a government that works for the people. We need government-run agencies to coordinate the efforts of fighting disease outbreaks caused by global warming. We need government departments to help coordinate regional and state-by-state efforts to plan for a hot future. We need college-educated and industry experts and community groups and faith groups to work with GOVERNMENT working groups to coordinate the ways we as a society can change. This is far from socialism or centralization of a federal government. We are at a time where the country has to work as a whole, and the privateers and carpetbaggers and those who see profits over all things must be served notice now about how their form of control and form of leadership and lobbying and influence are ready to be outted and canned. If IBM can’t get it right in Indiana with more than a billion bucks and its ITS wonks, then we need to revisit this entire mess of outsourcing and denigrating public servants and government agencies.

As a side note, I’ve spent quite a few hours speaking with Ron Reed, CEO of PacifiCAD, and in those engaging discussions, it’s become clear to me and many in Spokane that as an entrepreneur, Ron has taken it upon himself to become a community leader, and he sees his company’s mission as part of a community mission. His beliefs tie directly in empowering citizens and community groups to rudder their futures and destinies through citizen participation, participatory democracy and creative engagement. His belief ties directly into a citizenry that’s educated and one that has the tools and the agencies -- local, county, state, federal -- that serve the needs of the communities and regions. His belief is that private-public partnerships must work and must be strengthened. For many fellow business owners, this concept is antithetical to their belief in an unfettered environment, one without much oversight or citizen input. Other entrepreneurs like Ron Reed, however, see the value in a strong public school system and strong government agencies with experts in areas that will provide the health, safety and search for a sustainable way of life for all individuals.


It was a proud day for the governor.

By Jim Hightower

In December 2006, he stepped to the lectern, full of confidence: "No decision we've made," he told the assembled media, "is more clearly in the public interest."

Gosh, if that was his best decision, I'd hate to see one of his bad ones.

He's Mitch Danials, governor of Indiana and an ideological absolutist on the virtues of privatizing government, and he was announcing his hallmark plan to outsource that state's administration of food stamps, Medicaid, and other welfare benefits for poor folks. No need for all those government case workers, Daniels declared, because the needs of welfare recipients can be better met the corporate way – with efficient computers and call centers.

IBM was given a $1.1-billion contract from the state to take charge. Taxpayers, boasted the governor, will reap "a billion dollars in savings," while low-income families will enjoy the stellar service of the private sector.

Serving a public need, however, is not as easy as designing computer software. More than two years into the task, IBM's stumbles and fumbles include lost paperwork, frustrating runarounds, poorly-trained staff, inadequate equipment, and rejection of qualified applicants. The rate of mishandled food-stamp cases, for example, has more than tripled since IBM took over.

To try to fix this mess, the state has now issued a list of 200 reforms that IBM must achieve, giving it until September to shape up. The changes include hiring additional staff and managers, which will eliminate much of the highly-touted "savings" that privatization was to bring. A state official says bluntly: "It's possible we'd have to cancel the contract."

The so-called "efficiencies" of privatization are actually only achieved by shortchanging service and eliminating the personal touch – and that's no way to run a public program.

$1B privatization deal at risk

State could cancel contract to run welfare system

By Will Higgins

Nearly two years into the privatization of Indiana's welfare system, state officials are considering scrapping it amid widespread concerns that include the mishandling of nearly one in five food-stamp cases.

State welfare officials acknowledge that in about three-quarters of those cases, eligible Hoosiers are being denied aid they should be receiving.

"It's possible we'd have to cancel the contract," said Anne Murphy, secretary of the Indiana Family and Social Services Administration, referring to a $1.16 billion deal with IBM. She said the company will have until September to make improvements.

In January 2007, before the IBM system was rolled out, the portion of food-stamp cases that were mishandled was 4.38 percent. By January 2009, that number had shot up to 18.2 percent.

"The horror stories I've heard," said Charles Warren, chairman of the Indiana Institute for Working Families' advisory committee. "Applications rejected for the flimsiest of reasons, lost paperwork, people being told to start all over again."

Jane Jankowski, a spokeswoman for Gov. Mitch Daniels, said the governor is concerned about the system's performance so far but remains confident it will succeed.

Under the 10-year contract, one of the richest in state history, IBM Corp. and its subsidiary Affiliated Computer Services agreed to manage the state's system for doling out food stamps, Temporary Assistance to Needy Families and Medicaid payments to about a million Hoosiers. Critics' complaints are system-wide, though TANF and Medicare statistics were not readily available Tuesday.

Thomas Frank on the Bush administration: Sabotage by design

The author of "What's the Matter With Kansas?" discusses the corrosive relationship between conservatives and business, liberal bias and his new book about Republican misrule.

Editor's note: Read an excerpt from Thomas Frank's book here.

By Rick Perlstein

Aug. 7, 2008 | Thomas Frank is back with another hunk of dynamite. His "What's the Matter With Kansas?" monopolized political discussion for over a year when it came out in the summer of 2004. "The Wrecking Crew: How Conservatives Rule" should monopolize political conversation this year. It's the first book to effectively tie the ruin and corruption of conservative governance to the conservative "movement building" of the 1970s, and, before that, the business crusade against good government going back at least to the 1890s.

Here, for example, is a splendid bit Frank pulled from the Journal of Commerce from 1928 about why it's best for business to wreck the state: "The best public servant is the worst one. A thoroughly first-rate man in public service is corrosive. He eats holes in our liberties. The better he is and the longer he stays the greater the danger. If he is an enthusiast -- a bright-eyed madman who is frantic to make this the finest government in the world -- the black plague is a house pet by comparison."

The guy who wrote that was a military contractor and former head of the national Chamber of Commerce. The genius of today's conservative movement, however, is that it doesn't need barons of commerce to say these things anymore. Conservatives have won over a species of the bright-eyed madmen -- kids writing for college newspapers, who can call themselves "principled" conservative "idealists," fighting the "battle of ideas" while carrying the water of corporate America.

We see the results before us. While the Bush administration "presided over one of the greatest expansions of federal spending in history, the number of federal employees actually decreased during Dubya's term of office." The conservative ascendency did not merely change the composition of government; they sold government off to business, piece by piece -- and, of course, it was sabotage by design

Conservatives and Their Carnival of Fraud


I wonder if, back in the rosy-fingered dawn of our conservative era, all those Adam Smith-tied evangelists of "limited government" had any idea that they were greasing the skids for a character like 22-year-old arms dealer Efraim Diveroli?

Mr. Diveroli, whose tousled, slightly confused visage recalls the perpetually stoned Jeff Spicoli from the 1982 film "Fast Times at Ridgemont High," was the improbable recipient of a 2007 government contract to supply ammunition to our allies in Afghanistan.

The trouble was the munitions he sold were, like, seriously bogus. Old and partially defective, the stuff apparently originated in China, which is a Pentagon no-no. Mr. Diveroli was indicted by a federal grand jury in Florida on Friday on numerous counts, including allegedly attempting to defraud the government.

How could a kid barely able to buy beer secure a nearly $300 million defense contract? It will be interesting to find out. Maybe Mr. Diveroli's story will be the one that finally fixes public attention on the carnival of fraud, waste and profiteering that characterizes our system of government-by-contractor. Maybe it will finally persuade us to ask our politicians why it is that they hire Blackwater to do the job of the Marines and pay Kellogg Brown and Root to arrange the logistics for the Army wherever it goes.

And maybe it will finally call into question one of the greatest shibboleths of conservative governance. Although contracting-out has been celebrated by big thinkers from both parties and although it has been practiced in some form or other since the earliest days of the republic, an ideological commitment to outsourcing is one of the signatures of conservative rule.

The ostensible justifications for it, in the early days, were thrift and efficiency. The 1984 "Grace Commission," in which a battalion of corporate executives ransacked the government looking for waste, recommended privatizing federal operations as a way to save money. With the government plunged deep into deficit, government needed to hire out its duties to business in order to save itself.

The ideological assumption was only barely concealed: Whatever "big government" could do, the private sector could do better, cheaper and faster.

There was another unspoken ideological angle: Every federal job privatized was a job pried from the grip of the hated Washington bureaucracy. Every dollar contracted out meant that much less for bureaucrat unions and that much more for friendly companies, well-connected lobbyists and corporate political action committees.

In the Bush era, the idea was pushed to a sort of extreme, with each of our great national initiatives – the Iraq occupation, Katrina reconstruction and the Department of Homeland Security – largely entrusted to private contractors. We now often read about federal employees quitting to work for private contractors to do the same job as before for twice the pay.

We also read about efforts to shut down or outsource the agencies charged with scrutinizing outsourcing. Last week, the New York Times reported on the travails endured by one of the Army's chief contracting officials who says he became suspicious of huge, sketchy expenses being run up by KBR in Iraq. When he threatened to withhold future payments from the company – harsh toke, dude! – he quickly found himself out of the loop; the Army contracted out his job to a company that accepted KBR's numbers.

One fact about government outsourcing is settled: It sure doesn't save money. A Washington Post reporter who scrutinized Katrina reconstruction contracts in 2006 found that "the difference between the job's actual price and the fee charged to taxpayers ranged from 40 percent to as high as 1,700 percent." To cover damaged roofs with tarps, certain contractors billed the government $1.50 per square foot of roof covered; some of the people who actually did the work got under 10 cents per square foot. Guess who kept the difference.

Privatization also constitutes a fundamental change in the constituency to which government answers. Journalist Tim Weiner estimates that, by 2006, about half of the people working for the CIA in Iraq and the National Counterterrorism Center were contractors, former CIA personnel accountable not to the American public but to their employers. "The spectacle of jumping ship in the middle of a war to make a killing was unremarkable in twenty-first century Washington," he writes in his book, "Legacy of Ashes." Among the CIA's new hires, he reported, the saying is, "Get in, get out, get paid."

The days when conservatives railed against red tape and shrieked for efficiency in Washington now seem like a lifetime ago. When they finally got the opportunity to put their theory into practice, conservatives contrived instead one of the most wasteful systems ever seen.

It is time for a new Grace Commission, this one examining the sordid history of privatization in all its details. President Barack Obama should launch it on day one.

Write to


  1. The University of Oregon shows how the public private partnerships erode access and undermine the academic mission. More about it here:

  2. This is been going on for decades, and for those agronomists who have been researching the negative effects of Genetically Engineered crops -- with the complete idea of the scientific method as their credo -- they've seen their funding cut. Monsanto rules over universities. Big Pharma rules over universities.

    Read this about a man I've interviewed recently -- Dr. Ivor van Heerdon, fired at LSU, for predicting the Hurricane Katrina broken levees and death toll. Academia is so corrupted now that I wouldn't expect much coming out of institutions that isn't tainted with DARPA/Homeland Security/USA PatriotACT/mega-corporations influence.

    At WSU, the president lied and said that Omnivore's Dilemma would be cut from the common reading program because of costs. It was because of Big Ag BOard of Regent complaining about Michael Pollan's "message."

    {Among the things that Bill Marler feels passionately about are Washington State University (his alma mater), food safety and negotiation. So after he heard about a dustup on campus over the cancellation of a program requiring all freshmen to read the same book — Michael Pollan’s double-fisted examination of agribusiness, “The Omnivore’s Dilemma” — he stepped in to resolve it.


    This month [May 2009] administrators said budget cuts forced them to suspend this year’s program, but some faculty members and students were skeptical. They suspected that the decision had less to do with money than with pressure from the state’s powerful agribusiness interests. After all, they pointed out, the university had already purchased 4,000 copies of the book (published by Penguin Press), which links the agriculture industry to obesity, food poisoning and environmental damage.]

    {Ivor van Heerden, the Louisiana State University expert whose warnings of impending disaster before Hurricane Katrina made him a familiar face on newscasts and in articles and documentaries after the storm, has been fired by the school — in slow motion.

    Dr. van Heerden said that last week he met the dean of the school’s College of Engineering, David Constant, and was told that his contract would not be renewed after 2010, and that he would lose his title as deputy director of the school’s hurricane center. The move, he was told, was not related to his performance or to budget issues, but no other reason for the firing would be provided.}


This blog is brought to you by

This blog is brought to you by
Paul Haeder

Fuse Washington

Fuse Washington

Blog Archive