Thursday, November 27, 2008

WSJ Criticizes Contracting Out

My my what a difference a decade makes. The Wall Street Journal today published this. Yes the Wall Street Journal, the voice of Rupert Murdock, the voice of corporate capitalism in America sounding like Mother Jones magazine. The irony is that contracting out government services has created a welfare state for private companies, and an increase in the size of government. The exact opposite of what the neo-copns claimed it would do.

Government by Contractor Is a Disgrace
Many jobs are best left to federal workers.
Back in 1984, the conservative industrialist J. Peter Grace was telling whoever would listen why government was such a wasteful institution.
One reason, which he spelled out in a book chapter on privatization, was that "government-run enterprises lack the driving forces of marketplace competition, which promote tight, efficient operations. This bears repetition," he wrote, "because it is such a profound and important truth."
And repetition is what this truth got. Grace trumpeted it in the recommendations of his famous Grace Commission, set up by President Ronald Reagan to scrutinize government operations looking for ways to save money. It was repeated by leading figures of both political parties, repeated by everyone who understood the godlike omniscience of markets, repeated until its veracity was beyond question. Turn government operations over to the private sector and you get innovation, efficiency, flexibility.
What bears repetition today, however, is the tragic irony of it all. To think that our contractor welfare binge was once rationalized as part of an efficiency crusade. To think that it was supposed to make government smaller.
As the George W. Bush presidency grinds to its close, we can say with some finality that the opposite is closer to the truth. The MBA president came to Washington determined to enshrine the truths of "market-based" government. He gave federal agencies grades that were determined, in part, on how abjectly the outfits abased themselves before the doctrine of "competitive sourcing." And, as the world knows, he puffed federal spending to unprecedented levels without increasing the number of people directly employed by the government.
Instead the expansion went, largely, to private contractors, whose employees by 2005 outnumbered traditional civil servants by four to one, according to estimates by Paul Light of New York University. Consider that in just one category of the federal budget -- spending on intelligence -- apparently 70% now goes to private contractors, according to investigative reporter Tim Shorrock, author of "Spies for Hire: The Secret World of Intelligence Outsourcing."
Today contractors work alongside government employees all across Washington, often for much better pay. There are seminars you can attend where you will learn how to game the contracting system, reduce your competition, and maximize your haul from good ol' open-handed Uncle Sam. ("Why not become an insider and share in this huge pot of gold?" asks an email ad for one that I got yesterday.) There are even, as Danielle Brian of the Project on Government Oversight, a nonpartisan watchdog group in Washington, D.C., told me, "contractor employees -- lots of them -- whose sole responsibility is to dream up things the government needs to buy from them. The pathetic part is that often the government listens -- kind of like a kid watching a cereal commercial."
Some federal contracting, surely, is unobjectionable stuff. But over the past few years it has become almost impossible to open a newspaper and not read of some well-connected and obscenely compensated contractor foisting a colossal botch on the taxpayer. Contractors bungling the occupation of Iraq; contractors spinning the revolving door at the Department of Homeland Security; contractors reveling publicly in their good fortune after Hurricane Katrina.
At its grandest, government by contractor gives us episodes like the Coast Guard's Deepwater program, in which contractors were hired not only to build a new fleet for that service, but also to manage the entire construction process. One of the reasons for this inflated role, according to the New York Times, was the contractors' standing armies of lobbyists, who could persuade Congress to part with more money than the Coast Guard could ever get on its own. Then, with the billions secured, came the inevitable final chapter in 2006, with the contractors delivering radios that were not waterproof and ships that were not seaworthy.

Government by contractor also makes government less accountable to the public. Recall, for example, the insolent response of Erik Prince, CEO of Blackwater, when asked about his company's profits during his celebrated 2007 encounter with the House Oversight Committee: "We're a private company," quoth he, "and there's a key word there -- private."
So you and I don't get to know. We don't get to know about Blackwater's profits, we don't get to know about the effects all this has had on the traditional federal workforce, and we don't really get to know about what goes on elsewhere in the vast private industries to which we have entrusted the people's business.

The Failure of Privatization
Another Privatization Failure
Moral Turpitude Is Spelled Blackwater
The Neo Liberal Canadian State

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