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.

SEE:
The Failure of Privatization
Another Privatization Failure
Moral Turpitude Is Spelled Blackwater
IRAQ- THIS WAR IS ABOUT PRIVATIZATION
The Neo Liberal Canadian State


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C.D. Howe Canada's Grand Poobah

There is great irony in the fact that one of Canada's foremost establishment right of centre think tanks the C.D. Howe Institute which often promotes a neo-con agenda is named after one of Canada's foremost Pooh-Bahs of State Capitalism.

Grand Poobah is a term derived from the name of the haughty character Pooh-Bah
in Gilbert and
Sullivan's The Mikado. In
this comic opera,
Pooh-Bah holds numerous exalted offices, including Lord Chief Justice,
Chancellor of the Exchequer, Master of the Buckhounds, Lord High Auditor, Groom
of the Back Stairs, and Lord High Everything Else. The name has come to be used
as a mocking title for someone self-important or high-ranking and who either
exhibits an inflated self-regard, who acts in several capacities at once, or who
has limited authority while taking impressive titles.

Enter Pooh-Bah.

NANK. Ko-Ko, the cheap tailor, Lord High Executioner ofTitipu! Why, that's the highest rank a citizen can attain!
POOH. It is. Our logical Mikado, seeing no moraldifference between the dignified judge who condemns a criminal todie, and the industrious mechanic who carries out the sentence,has rolled the two offices into one, and every judge is now hisown executioner.
NANK. But how good of you (for I see that you are anobleman of the highest rank) to condescend to tell all this tome, a mere strolling minstrel!
POOH. Don't mention it. I am, in point of fact, aparticularly haughty and exclusive person, of pre-Adamiteancestral descent. You will understand this when I tell you thatI can trace my ancestry back to a protoplasmal primordial atomicglobule. Consequently, my family pride is somethinginconceivable. I can't help it. I was born sneering. But Istruggle hard to overcome this defect. I mortify my pridecontinually. When all the great officers of State resigned in abody because they were too proud to serve under an ex-tailor, didI not unhesitatingly accept all their posts at once?
PISH. And the salaries attached to them? You did.
POOH. It is consequently my degrading duty to serve thisupstart as First Lord of the Treasury, Lord Chief Justice,Commander-in-Chief, Lord High Admiral, Master of the Buckhounds,Groom of the Back Stairs, Archbishop of Titipu, and Lord Mayor,both acting and elect, all rolled into one. And at a salary! APooh-Bah paid for his services! I a salaried minion! But I doit! It revolts me, but I do it!
NANK. And it does you credit.
POOH. But I don't stop at that. I go and dine withmiddle-class people on reasonable terms. I dance at cheapsuburban parties for a moderate fee. I accept refreshment at anyhands, however lowly. I also retail State secrets at a very lowfigure. For instance, any further information about Yum-Yumwould come under the head of a State secret. (Nanki-Poo takes hishint, and gives him money.) (Aside.) Another insult and, Ithink, a light one!

The C.D.Howe Institute flies in the face of the endeavours of Howe, who as Minister of Everything, oversaw the development of public and crown corporations in Canada. Federally funded, not joint private public partnerships, which of course would have demanded private capital to develop. With the victory of neo con agenda in the ninties promoting privatization of public and government infrastructure the C.D. Howe institute gave establishment legitimacy to the efforts of other right wing lobbyists and thnk tanks like the Fraser Institute and its east coast doppleganger; the Atlantic Institute of Market Studies , and the newly minted Frontier Centre for Public Policy.

The C.D. Howe Institute
(formerly the Howe Research Institute), is a nonprofit policy research
organization established in 1973 by a merger of the Private Planning Association
of Canada, formed in 1958, and the C.D. Howe Memorial Foundation. It is located
in Toronto. Its principal source of funding is the fees contributed by a
membership that includes corporations as well as individuals with a background
in business, the professions or academia. The institute's staff is responsible
for the preparation of the annual Policy Review and Outlook and various other
publications on topical issues. The institute also commissions leading
researchers (academics for the most part) to write papers and monographs on a
wide range of topics such as fiscal and monetary policy, trade policy, social
policy, the environment, federal-provincial relations and constitutional reform.
Although the main focus of the institute's research program is the economy, the
range of topics it has covered over the years is very wide and occasionally
extends to non-economic issues such as culture and ethnicity.

The right wing agenda saw public policy as moving from the State capitalizing public services and infrastructure and moving towards selling off those assets to deal with its debt and deficit crisis. Public good was now replaced with state funding for private profit. Howevere now that we face the economic melt down that this ideology resulted in we will see if this think tank of Canada's establishment changes it's tune. Why do I find that unlikely.

C.D. Howe Institute
Benefactors Lecture, 1997

D.G. McFetridge
Professor and Chair,
Department of Economics,
Carleton University
Toronto, October 22, 1997
Sponsored by Dofasco Inc.

The formation of public policy can be viewed from a number of perspectives.
Some see it largely as the outcome of tradeoffs between contending
interest groups; policy changes reflect nothing more than the ascendancy
of one interest group over another. To others, including the
C.D. Howe Institute, ideas matter. A good idea, well explained, can
overcome the power of even an entrenched interest group.
If ideas do matter, there is certainly merit in bringing the evidence
on the economic benefits of privatization to public attention. Privatization
is about more, much more, than selling off the bus company. It is
about institutional design, and in some countries (New Zealand, for
example) it has involved considerable reflection on just what should be
expected of government.
What we have come to call privatization is part of a larger process
of institutional change involving commercialization, contracting out,
and regulatory reform as well as the sale of state-owned enterprises to
the private sector. The literature on this process is vast but of uneven
quality.

The evidence on conventional contracting out, especially by municipal
governments, is unambiguously positive: it reduces the cost of
providing the services involved. There is more skepticism and less
evidence on the consequences of contracting for social services and for
the joint supply of infrastructure and services (public/private partnerships).
These instruments are likely to present serious—but not necessarily
insoluble — contract design problems. They may require the
government to be an active and strategic purchaser in ways not envisaged
by privatization zealots. Nevertheless, the potential economies,
especially in the accumulation and use of knowledge, make continued
experimentation worthwhile.
With respect to the entire process of commercialization, regulatory
reform, and the sale of state-owned enterprises to the private sector, the
weight of the evidence to date is that it has been beneficial. The precise
contribution of the change in ownership to the gains that have resulted
from the process as a whole is difficult to identify. One can argue,
however, that privatization is an essential part of the process in that it
provides the impetus for commercialization and makes regulatory reform,
especially regulatory forbearance, possible.
Whether or not privatization is a necessary part of the process, once
commercial objectives have been adopted and regulatory reform has
allowed competition or potential competition to exert its disciplining
force, there is little, if anything, to be gained from continued state
ownership — provided that the government sells its interest at a price
equal to the present value of the income it might expect to derive from
continued ownership.
Although the international experience with process ofcommercialization,
regulatory reform, and privatization has been favorable and
there are good conceptual arguments for privatization itself, the case for
individual privatizations must still be made on the merits. The body of
existing evidence is not so strong or so detailed that it can be taken to
imply that, say, the province of Saskatchewan would necessarily realize
significant economic benefits from privatizing its electric power or
telecommunications utilities.
The theoretical and empirical literature on privatization reminds
us to remain open to the potential benefits of employing decentralized
market or market-style incentives in place of hierarchy and command
and control. The ongoing international experimentation in institutional
design has been worthwhile and is clearly worth pursuing further.
The literature also teaches that privatization is frequently not about
pushing a button and getting less government. Unless the political
forces that brought about government intervention disappear (and they
may in some cases), privatization will be about getting different government,
rather than less government. It may involve catering to a different
set of interest groups or catering to the same interest groups in a
different way. It may involve the same or similar political activity
in different forums. It is often not simply a matter of opting for the
invisible hand.

C.D. Howe - "Minister of Everything" - Biography of C.D. Howe

C.D. Howe was a cabinet minister for 22 years, first in the government of Mackenzie King, and then in the government of Louis St. Laurent. Nicknamed the "Minister of Everything," C.D. Howe was forthright and forceful, and more interested in getting things done than in policy. He mobilized Canada for World War II, turning the Canadian economy from one based primarily on agriculture to one based on industry, and after the war turned it into a consumer economy spurred by veterans.

Career Highlights of C.D. Howe:
created a national air service, Trans-Canada Airlines (later Air Canada)
created the Canadian Broadcasting Corporation (CBC) as a Crown corporation
created the National Harbours Board
restructured the debt-ridden Canadian National Railway (CNR)
established the St. Lawrence Seaway
established Canada's nuclear industry
initiated the Trans-Canada Pipeline
Professional Career of CD Howe:
Engineer
Taught at Dalhousie University in Halifax
Businessman - designed and built grain elevators
Political Affiliation:
Liberal Party of Canada
Riding (Electoral District):
Port Arthur (Ontario)
Political Career of CD Howe:
C.D. Howe was first elected to the House of Commons in 1935.
He was appointed Minister of Railways and Canals and also Minister of Marine. The two departments were soon combined into the Ministry of Transport. C.D. Howe oversaw the reorganization of Canadian National Railways, and the creation of the National Harbours Board and Trans-Canada Airlines, the forerunner of Air Canada.
In 1940, C.D. Howe was appointed Minister of Munitions and Supply in charge of war production for Canada. As head of the War Supply Board, and with the authority of the War Measures Act, C.D. Howe created a huge rearmament program using "dollar-a-year men," business executives called to Ottawa to reorganize the economy. The British Commonwealth Air Training Plan, which created more than 100 aerodromes and landing fields and trained over 130,000 airmen, was one of the results.
In 1944, C.D. Howe was appointed Minister of Reconstruction, and then Minister of Reconstruction and Supply, and began turning the economy toward consumer needs.
C.D. Howe became Minister of Trade and Commerce in 1948.
In 1951, with the growth of the Cold War, C.D. Howe became Minister of Defence Production as well as Trade and Commerce and oversaw the growth of the Canadian aircraft industry.
In 1956, C.D. Howe forced the plan for the Trans-Canada Pipeline, a gas pipeline from Alberta to central Canada, through Parliament but paid heavily when the Liberal government lost the next election and he lost his seat.
C.D. Howe retired from politics in 1957 at the age of 70.

C. D. Howe
C. D. Howe was known for getting things done.
That made him exactly the type of leader Canadians needed to channel their domestic energies into military might during the Second World War.
Clarence Decatur Howe is best remembered as Prime Minister Mackenzie King's right-hand man. When King decided to meld responsibility for railways, marine transport and civil aviation into one powerful Ministry of Transport in 1936, the prime minister put Howe in charge.
Not only did Howe's achievements in transport help ready Canada's transportation systems for the massive load they would have to carry during the war, but the transportation policy expertise he acquired left him well-prepared to direct the all-important Ministry of Munitions and Supply during the war.
Howe was, as he put it, a "Canadian by choice." A carpenter's son, he was born in Waltham, Mass., in 1886, moving to Canada in 1908 to teach civil engineering at Dalhousie University in Halifax. He later established a consulting engineering firm that specialized in grain elevators.
King brought Howe into politics in 1935 and he immediately began to cut a swath through bureaucracy, refusing to be bound by tradition and red tape, seeing himself much more as an implementer than a policymaker.
Howe was particularly interested in establishing a strong Canadian presence in the growing field of civil aviation.
He was instrumental, before and after the war, in establishing or expanding Trans-Canada Air Lines, the National Harbours Board, Canadian National Railways, the St. Lawrence Seaway, the TransCanada Pipeline and even the CBC.
Canada's first Minister of Transport took over a Canadian transportation system that was fragmented and outdated.
He centralized the administration of ports and reformed the debt-laden CNR, increasing efficiency and accountability that would be so important during the war.
Unemployed workers of the "Dirty '30s" were mobilized to build airstrips across the country and Trans-Canada Air Lines, Air Canada's predecessor, was established as a Crown corporation.
All these measures helped to pull the country's transportation network out of the Depression, preparing it for the incredible challenge that it would face in 1939-45.
When Canada entered the war in September 1939, Howe retained the Transport portfolio but was also asked to take on Munitions and Supply.
One of Britain's first requests was that Canada play host to the British Commonwealth Air Training Plan, which would train nearly 50,000 pilots and groundcrew by war's end.
Howe left Transport to concentrate on Munitions and Supply in July 1940, but continued to prod the transportation sector for the extraordinary performances he was demanding of other Canadian industries.
Before the end of the war in 1945, railway traffic had tripled in Canada as food, munitions and other war supplies were rushed to Atlantic ports.
Howe was criticized for forging ahead with little regard for costs, but the results he engendered soon silenced his critics. Costs wouldn't matter if the war was lost, he told colleagues, and in victory, costs would be forgotten.
The war, of course, was won and the relentless energy of Canada's first Minister of Transport played a major role in the victory.
Canada's other wartime ministers were P. J. A. Cardin, 1940-42; J.-E. Michaud, 1942 - April 1945, and Lionel Chevrier, April 1945 - June 1954.

SEE:

Right Wing Environmentalists

The Real Story of Alberta's BSE Crisis

The End of Public ACCESS

CKUA History of a privatization putsch

Canada’s Billion Dollar P3 Boondoggle

Social Insecurity- The Phony Pension Crisis

Laundry Workers Fight Privatization

Legacy Of The Ralph Revolution

Private Vs. Public Monopoly

P3= Public Pension Partnerships

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Nuclear Bait and Switch

The reason that Gary Lunn fired the head of the Nuclear Safety Commission was to cover up not only his own complicity in the whole Chalk River screw up but also to divert attention from the fact that the Conservative appointed Chairman of AECL was assigned to look at privatizing the AECL. Instead of spending more money on maintenance the Conservatives were and are looking at selling off AECL. Dismantling the effectiveness of the Nuclear Safety Commission and changing its mandate would allow for an easier sale. The Chalk River crisis that led to this political meltdown was tailor made for the Tories Hidden Agenda.

Political and industry sources suggest the Chalk River crisis was very timely for the government, breaking just as it mulled transferring AECL, and its voracious appetite for federal cash, to the private sector. The isotope issue allowed the government to impugn a regulator that has acted as an obstacle to that privatization.

Also limiting AECL is the fact that as a Crown corporation it has limited ability to borrow money or seek alternative financing for its projects. "It can't run itself like a regular business," said the insider. "They used to run on a year-by-year basis, so that by the time they got approval for their plan, it was time to start writing another one. Who can run a business like that? No one."

It is an open secret in Ottawa that the Conservatives' preferred solution to AECL's dilemma is privatization. Doing so would allow the company more latitude in financing while unburdening the government of a troublesome file. Other former Crown corporations have been successfully privatized, including MDS Nordion, the company that distributes the isotopes produced at Chalk River.

Stephen Harper, the Prime Minister, this week hinted at major changes to come, noting that AECL suffered from financial and managerial challenges.

SEE:

A Little Golf A Little Hustle

CANDU

Nuclear NIMBY

Tarsands To Go Nuclear

Conservatives Glow Green





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Harpers Other War

This is Harpers other war, though it shares something in common with his War in Afghanistan. The war on drugs. Well actually the war on Pot. The new anti-drug law Bill C-26 was announced the same week Karlheinz Schrieber was making headlines, so quietly the Harpocrites slipped their crime bill into parliament complete with mandatory sentences for marijuana growing and possession. And the media as well as the Liberal Opposition ignored this new draconian legislation.

While New Democratic Party (NDP) drug policy critic MP Libby Davies (Vancouver East) has already denounced the measure, neither the Liberals nor the Bloc Québecois have issued statements on it. Nor had either party responded to Chronicle requests for comment by press time.

Burnaby MPs say they will vote against the bill.

Bill Siksay, NDP MP for Burnaby Douglas, says similar laws have already failed in the U.S.

"They fill up the prisons, they disrupt families, but they don't solve the problem," Siksay said in an interview Thursday.

"We've given fare to many people's criminal records for marijuana use, and we've clogged the courts for way too long."

Instead, the government should decriminalize marijuana, Siksay said.

"We need to upset the apple cart when it comes to drug policy, he added.

Peter Juilan, NDP MP for Burnaby New Westminster, agreed, saying the federal government should spend more money on front line policing.

"The bill is the wrong approach to take," he added.

It's Harpers other war. And it is a dangerous one. For it would return us to convicting recreational drug users for victimless crime. And in creating harsh minimum sentences it attempts to duplicate the creation of a prison industry in Canada like that in the U.S.

With an eye on past complaints from the U.S. that Canadian chemical drugs and the country’s booming illegal marijuana industry are threats to America, the bill imposes a two-year minimum for possession of more than one kilogram of a schedule I drug for the purpose of export trafficking. Possession of cannabis and marijuana for the purpose of exporting – with no aggravating factors or minimum amount – would carry an automatic one-year minimum.

But, despite the political drumbeats about drugs and the image of public hysteria, Ertel says the legislation goes too far, too severely.
A conviction for producing from one to 200 marijuana plants for the purpose of trafficking carries a minimum jail sentence of six months. The scale rises to a two-year automatic sentence for the production of more than 500 plants. The maximum penalty for production of marijuana for the purpose of trafficking jumps to 14 years from seven.

“This is obviously crazy stuff,” says Ertel. “They’ve got a minority government and they’re playing cheap politics and the idea of the cheap politics is ‘go ahead and vote against us on this crazy bill and then we’re going to say you guys love drugs.’”

He argues the automatic jail time — no allowance for mitigating considerations — will inevitably prompt the kind of appeal that led to a 1987 Supreme Court of Canada decision striking down a seven-year mandatory-minimum sentence under the Narcotic Control Act as cruel and unusual punishment.

In R. v. Smith, the case of a B.C. man who pleaded guilty to importing seven and a half ounces of cocaine from Bolivia, Justice Antonio Lamer wrote, “The serious hard drugs dealer who is convicted of importing a large quantity of heroin and the tourist convicted of bringing a ‘joint’ back into the country are treated on the same footing and must both be sentenced to at least seven years in the penitentiary.”

Justice Lamer, though, included this obiter: “A minimum mandatory term of imprisonment is obviously not in and of itself cruel and unusual punishment.”
Ertel says the new Conservative bill may not only violate s. 12 of the Charter in certain circumstances, but it also targets the wrong problem, with the wrong weapon.

“Nobody’s putting anybody who’s making liquor into jail, and almost all violent crime, it’s above 90 per cent, is alcohol related,” he says. “I’ve never seen a case where somebody beat up their wife after they smoke a joint; it doesn’t happen.”

A Statistics Canada Juristat report shows drug trafficking accounted for four per cent of all cases in Canadian adult criminal courts in 2004, compared to 11 per cent for impaired driving. Common assault accounted for another 11 per cent, theft cases were nine per cent and major assault accounted for six per cent. Homicide, including attempted murder, accounted for 0.2 per cent of the cases.

Ertel says the mandatory minimums will mean more and longer drug trials because it will be impossible to bargain pleas: “The courts grind to a halt when there’s no incentive for pleading guilty.”

NDP MP Joe Comartin, a former criminal lawyer in Windsor, offers another twist. He says prosecutors will stay drug charges in an attempt to ration court time.
“They just can’t prosecute, they’ve run out of resources,” says Comartin. “They’ve got 100 more files behind them.”

SEE:

Contact High

Canada Goes To Pot

Canada's Prison Industrial Complex

Narco Politics

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Royalties Pay For Jobs

All those threats about job losses in the oil patch and the bosses protest at the Leg seems to have overlooked a little fact. Job losses in the public sector in particular our hospital sector were caused by the Klein government bailing out Big Oil in the nineties.

As this letter writer to the Calgary Sun pointed out.

JUST ANOTHER INTEREST GROUP

There seems to be a double standard in both media and government attitude regarding regular public service workers and the oil industry. In the '90s, during the Klein "devolution," health-care professionals, teachers, public service workers and their collective bargaining agents protested cutbacks to health-care, education and other public services. They warned of gross shortages and infrastructure deficits in the future (which all came true). They were written off as "special interest groups" by media and government. Now an independent panel indicates the oil and gas industry has not been paying its fair share and the industry gets closed-door meetings with the government and is regarded as a VIP by the media. They come out with a government decision that still has them paying less than their fair share. They still grumble and yet neither the media nor government disregard their threats and grumbling as "just another special interest group."

Larry Connell, RN

The attack on the public sector was the result of low royalties and tax breaks for Big Oil. The neo-con advisers to the Klein government called for cuts to public sector spending, freezes on wages and contracting out to make up for the deficit created by this give away. The deficit was caused by the failure of the government to collect its fair share, even back then, as the auditor general pointed out, of the royalties, even as low as they were; a penny on the dollar.

The cuts to the public sector were ideologically driven, at the time the Klein and Harris governments, indeed in 1995 so did the Federal Liberals, embraced the idea that the private sector can deliver services cheaper and more efficiently then unionized public sector workers.

Well cheaper yes by driving down wages and benefits. Efficiently well no, because they low balled their bids and now the costs are rising. Unionized public sector workers may cost more in wages and benefits, the workers in the private sector, but their costs are controlled by collective bargaining. And the government has controlled public sector wages in Alberta to be below inflation for the past decade. Whereas private sector costs are now skyrocketing.

Today infrastructure costs are higher because the Tired Old Tory government spent the last decade acting like Scrooge when it came to infrastructure expenditures. Instead of spending the annual surpluses they did get, which occurred annually since the pseudo-crisis of 1993, they hoarded the money crying poverty. Now the chickens have come home to roost.

Ralph cut nurses and doctors as well as capping nursing programs in Alberta universities. The cuts over a decade created a crisis we now face in staffing. especially in the hospital sector. The result has been a decline in health care services, with deadly results.

As we have seen investment in public sector jobs have been a boon to the Canadian economy. Costs of having services delivered in house are much lower than contracting out in an overheated economy. So much for the supply side economics of the Fraser Institute and it's pals.

So the next time some oil supply company workers complain that they may lose their jobs tell them to talk to the nurses in this province who left during the nineties to find work elsewhere.



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Contracting Out Harpers War

Canada quietly has expanded the use of contracting out and privatization of military operations for Harpers War. Not only is Tim Horton's a private contractor working at taxpayer expense in Kandahar so is SNC Lavalin.

It is Canada's version of Bechtel and Halliburton. And like them it too has been rocked by scandals.But unlike them it is also a war-profiteer making weapons systems and small arms. It processes depleted uranium for weapons use in Iraq and Afghanistan. And your pension dollars help support them.

As this article points out if you want the real date that Canada will remain in Kandahar till, try 2012.

Since Canadian troops deployed to southern Afghanistan in the spring of 2006, the number of contractors working in support and logistics roles has more than doubled to nearly 200.

The privatized support dates back to Canada's multiple deployments in the former Yugoslavia in the late 1990s. Anticipating more overseas mission in the aftermath of the Sept. 11, 2001, terrorist attacks, the federal government turned to defence-engineering giant SNC Lavalin, which won a five-year, $500-million contract that has renewal options running until 2012.

The federal government has already quietly opted to renew the contract, which has set renewal dates of 2007, 2009 and 2011.

In Afghanistan, for example, SNC Lavalin-PAE was given a five year, $400 million contract by the Canadian Department of Defense to build and maintain Camp Julien and provide laundry, food and other services to Canadian occupation forces there. And to meet the increasing demand for Quebecois bullets, SNC is building another artillery testing range on Cree land in Waswanipi, Quebec. Opposition to the project is rising in Waswanipi because the range will disrupt an important trap-line used by Cree hunters.

We even have our own version of Blackwater happening in Kabul.

Canada's diplomats in Kabul and visiting high-value targets like Prime Minister Stephen Harper are protected by a group of heavily armed gunmen hired by Saladin Security, a British firm with a long history of secretive and clandestine operations.

Department of Foreign Affairs officials in Ottawa are tight-lipped about the deal struck with Saladin, whose gun-toting employees provide perimeter security, operate checkpoints, serve as bodyguards and form a heavily armed rapid-reaction force designed to move quickly to thwart an attempted kidnapping and rescue survivors of suicide attacks or car-bombings in Kabul.

The department won't even confirm that Saladin's most recent contract - which ended in June of 2007 - has been renewed, but observers of the Canadian embassy in Kabul say Saladin employees remain on guard. Some Saladin guards, in baseball caps and paramilitary uniforms, openly patrol the road outside the Canadian diplomatic compound in Kabul.

But details of the extent of Canada's reliance on a private firm for diplomatic protection are even more scant than the now-controversial U.S. deal with Blackwater Security, the American firm whose hired gunmen killed 17 Iraqi civilians last month while protecting a diplomatic convoy.

Saladin Security, Ltd. is a private military company based out of London and headed by industry veteran Maj. David Walker. The company was orginally established as a subsidiary of Keenie Meenie Services, and financed by John Martin Southern of Blackwall Green, Ltd., in 1978 to handle local contracts. As KMS disappeared from the global stage, Saladin began taking on contracts in the Middle East and Sri Lanka.

They provide military training, weapons procurement, logistical support, post-conflict resolutions, commercial property security, and risk analysis.

Saladin trains the Omani troops and runs their airforce which is flown and maintained almost completely by British personnel. RAF bases in Oman were used as launching pads for American flights into Afghanistan. Saladin, along with KMS, aided the CIA and British Intelligence in arming and training the Mujahideen in the war against Soviet imperialism.

Saladin is currently operating in Iraq.

In 1984, KMS was approved by the British government to train the Special Task Force arm of the Sri Lankan military against the Tamil rebels. The STF was widely reported to have been committing atrocities against the Tamil population and by 1987 KMS had moved their two hundred personnel to Latin America. The British press had reported, though the company denied it, that employees for KMS were quitting their jobs because the Sri Lankan troops were out of control.

During the Iran-Contra investigations, KMS was accused of repeatedly carrying out sabotage operations in Nicaragua that included mining the Managua harbor and destroying enemy camps, buildings and pipelines.

On November 22, 1987 the London Observer's Simon de Bruxelles published a three page proposal from KMS to the CIA suggesting sending small teams of instructors into Afghanistan to train rebels in "demolition, sabotage, reconnaissance and para-medicine."

KMS was accompanied by Saladin Security (a subsidiary) and Defence Systems Limited in their training programs in Afghanistan, Saudi Arabia and Oman.

KMS closed down in the early 1990s, and Saladin began operating more internationally.

The BRITISH ASSOCIATION OF PRIVATE SECURITY COMPANIES (BAPSC) works to promote the interests and regulate the activities of UK based firms that provide armed defensive security services in countries outside the UK.

A Fistful of Contractors: The Case for a Pragmatic Assessment of Private Military Companies in Iraq," by David Isenberg
BASIC RESEARCH REPORT 2004.

Speaking of Blackwater they are used for training Canadian forces used in Afghanistan as well as to train the secret JTF-2 special forces, which have seen action in Iraq.

Select Canadian soldiers have been sent to Blackwater U.S.A. in North Carolina for specialized training in bodyguard and shooting skills. Other soldiers have taken counterterrorism evasive-driving courses with the private military company now at the centre of an investigation into the killings of Iraqi civilians and mounting concerns about the aggressive tactics of its workers in the field.

Canadian military police trained by Blackwater operated in Kandahar last year in support of coalition special forces. Members of the Strategic Advisory Team, which operates in Kabul, also underwent counterterrorism driving training, according to a military official.

The Ottawa-based counterterrorism unit, Joint Task Force 2, has also maintained ongoing training links to the company.

Military officials did not have further details on why Blackwater would be hired, but promised to provide those. Later, however, they did not comment on the matter.

Canadian Forces spokesman Lt.-Col. Jamie Robertson said the military does not discuss its special forces training. But he noted that Blackwater and other firms have been contracted to provide services for other units.

And the Afghan security forces used to protect the PRT in Kandahar are hired guns, euphemistically called contractors, mercenaries by any other name. And they are under the control of warlords.

So what is an occupying army, huddled behind the wire, supposed to do? Well, if you are NATO then you go ahead and pay some trustworthy locals to fight for you. That is, you hire mercenaries. Under the headline, "British hire anti-Taliban mercenaries", the Times of London reports on "newly formed tribal police who will be recruited by paying a higher rate than the Taliban."

Canadian forces, too, are getting in on the action. "For five years Col. Toorjan, a turbaned, tough-as-nails, 33-year-old soldier, has been working alongside U.S. and Canadian forces in Afghanistan as a paid mercenary commander," reports Canada's National Post. "Today, his militia force of 60 Afghan fighters guards Camp Nathan Smith, the Canadian provincial reconstruction team site (PRT) in Kandahar, and guides Canadian soldiers on their patrols outside the base." Toorjan and his armed men "wield significant influence in Kandahar's complex security web", making him a treasured ally, though before 9/11 he was "in effect a warlord", said the second-in-command of Canada's Provincial Reconstruction Team.

The use of mercenaries, it should be noted, runs counter to the International Convention on Mercenaries (1989). Canada, however, along with the USA, the UK and many others, is not a signatory to that treaty.

And the contracting out continues even when our vets retire an go looking for a new job.

OTTAWA, ONTARIO--(Marketwire - Oct. 25, 2007) - The Government of Canada today announced new measures to help retiring Canadian Forces Veterans make the successful transition from the military to new civilian careers. The Honourable Greg Thompson, Minister of Veterans Affairs; Laurie Hawn, Parliamentary Secretary to the Minister of National Defence; and Bram Lowsky, General Manager, Right Management, formally launched the national contract for the Job Placement Program.

The value of the contract with Right Management is for up to $18.5 million over the next four years.

Right Management is a subsidiary of Manpower Inc. the temporary placement agency that has benefited from government and corporate downsizing. The Conservatives continue the policy of the Liberals of Reinventing Government by downsizing departments and contracting out. When you contract out you no longer have to worry about staffing costs like benefits, pensions, nor pesky union grievances.

Right Management is a career transition and consulting firm operating in more than 40 countries.

Founded in 1980, Right Management was at the forefront of “inventing” the outplacement industry, and expanded globally to match the footprint of its multi-national clients.

Beginning in 1996, Right Management extended into consulting services to help clients address human resource and organizational consulting needs.

Right Management was acquired by Manpower in January 2004.

Manpower Inc. operates under five brands: Manpower, Manpower Professional, Elan, Jefferson Wells and Right Management.

Job Protection for

Canadian Reservists

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Support Public Radio

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• Campaign Starts Tomorrow!
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Campaign Starts Tomorrow!

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The fun begins tomorrow at 6 AM! Make your pledge online or call in to speak to one of our awesome volunteers. While you are here - online, I mean - be sure to check out the fabulous prize line up...which do you want to win??

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SEE:

CKUA: Ten Years After The Privatization Putsch

The End of Public ACCESS

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Public-Access, Community-access, Canada, public-broadcasting, CKUA, privatization, University of Alberta Radio, Alberta, media, CJSR, Edmonton, Alberta, Canada, Redmonton, community-radio, media, funddrive, fundraising, UofA

Private Vs. Public Monopoly

Those who complain loudest about State/public monopolies become strangely quiet when privatization leads to the inevitable creation of private market monopolies, as is the case with the privatization of liquor stores in Alberta.

And note these private beneficiaries of market monopoly are Income Trusts to avoid paying taxes.

Liquor Stores Income Fund has completed its takeover of Liquor Barn Income Fund, creating Western Canada's largest independent liquor retailer, with 188 stores in Alberta and British Columbia and a market capitalization of about $470 million.

One analyst, who asked to remain anonymous, said booming economies in Alberta and British Columbia have made things difficult for privately owned liquor stores in some ways.

Stores face challenges in recruiting enough staff to maintain regular business hours, he said. With the major liquor retailers paying higher wages, that becomes especially difficult for smaller operations.

"If you can't compete for employees as a single-store owner, then you put more hours into the store personally, and that gets tiring. Those people might look to sell their stores to some of the consolidators," the analyst said.

The deal creates a company with 188 liquor outlets in Alberta and B.C. and a market capitalization of about $470 million. Liquor Stores previously has 107 outlets to Liquor Barn's 81.

TAKEOVER TIMELINE

- 2006: Liquor Stores CEO Irv Kipnes approaches Liquor Barn about a possible acquisition, but they are not interested.

- February, 2007: Liquor Stores makes a proposal to acquire Liquor Barn for .53 units, which is rejected on March 8. The bid is not communicated to the market.

- April 10: Liquor Stores launches a hostile bid of .53 units, and at this time the February offer is revealed.

- April 19: Liquor Barn board recommends rejection of the offer.

- May 28: A sweetened offer of .57 units is made, which the Liquor Barn board unanimously accepts two days later. The deadline for the offer is extended until 1 a.m. June 8.

- May 30: Liquor Barn CEO John Mather and several other unitholders say the new offer isn't rich enough. Mather, who has bought an additional $7.2 million worth of Liquor Barn units, is put on paid leave by his board.

- June 7: Liquor Stores says it has all but two of the founding Liquor Barn unitholders committed, but at market close is still short of the 66.7 per cent needed to close the deal.

- June 8: Liquor Stores says it has completed the acquisition with 74 per cent of Liquor Barn unitholders voting in favour of the deal.

See

Privatization


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Yeltsin's Legacy

Kleptocracy in the Guise of Reform

The decision to transform the economy of a huge country without the benefit of the rule of law led not to a free market democracy but to a kleptocracy with several dangerous economic and psychological features.

In the first place, the new system was characterized by bribery. All resources, at first, were in the hands of the state; businessmen thus competed to “buy” critical government officials. The winners were in a position to buy more officials, with the result that the practice of giving bribes grew up with the system.

Besides bribery, the new system was marked by institutionalized violence. Gangsters were treated like normal economic actors, which tacitly legitimized their criminal activities. At the same time, they became the partners of businessmen who used them as guards, enforcers, and debt collectors.

The new system was also characterized by pillage. Money obtained as a result of criminal activities was illegally exported to avoid the possibility of its being confiscated at some point in the future. This outflow deprived Russia of billions of dollars in resources that were needed for its development.

Perhaps more important than these economic features, however, was the new system’s social psychology, which was characterized by mass moral indifference. If under communism, universal morality was denied in favor of the supposed “interests of the working class,” under the new reform government, people lost the ability to distinguish between legal and criminal activity.

Official corruption came to be regarded as “normal,” and it was considered a sign of virtue if the official, in addition to stealing, also made an effort to fulfill his official responsibilities. Extortion also came to be regarded as normal, and vendors, through force of habit, began to regard paying protection money as part of the cost of doing business.

At the same time, officials and businessmen took no responsibility for the consequences of their actions, even if they led to hunger and death. Government officials helped organize pyramid schemes that victimized persons who were already destitute, police officials took bribes from leaders of organized crime to ignore extortion, and factory directors stole funds marked for the salaries of workers who had already gone months without pay.

From "Criminal Communism" to "Criminal Capitalism"

Satter said that Russia's transition from "criminal communism" to "criminal capitalism" had occurred in three stages: hyperinflation, privatization, and criminalization. Hyperinflation began on 2 January 1992, when the Gaidar government freed virtually all prices, consequently wiping out the life-savings of millions of Russians. According to Satter, this same government also chose to ignore a law passed by the Supreme Soviet calling for the indexation of savings accounts in the event of price liberalization, deeming it the responsibility of the old regime. Yet while the majority of the population was being driven into poverty by inflation, a group of well-connected insiders was becoming very rich.


Satter mentioned several ways in which people with access to the state budget and ties to state officials were able to amass wealth including: establishing and fooling the public into investing in pyramid schemes, speculating in dollars, obtaining lucrative licenses to export raw materials, and appropriating and collecting interest on state credits that were supposed to support industry. Satter asserted that by the time privatization got underway, the country was already divided into haves and have-nots.


This hyperinflation had been briefly preceded by "wild privatization," during which government and party officials began to privatize whatever they could get their hands on, noted Satter. Former government officials who had once been in charge of state resources became the new owners and proceeded to sell off these resources. In addition, an amendment to the law on cooperatives allowed factories to create cooperatives within the framework of the factory, which encouraged massive theft as factory directors were now given the means to establish cooperatives through which to write off and sell factory supplies.


However, according to Satter, the real theft of the state's most valuable enterprises began with money privatization in 1994. At "public" auctions for state property, the bidders for the most desirable enterprises were well-connected to local officials, with the results of these auctions being largely determined in advance. The loans-for-shares program, in which the government exchanged shares of enterprises for loans, greatly benefited the banks empowered by Yeltsin in 1993 to handle government accounts. These banks used government money to make short-term loans at extremely high rates of interest. Then, having made a profit using the government's money, the banks were able to loan it back to the government in exchange for valuable enterprises. This is how the much-talked-about oligarchy came into being and eventually began to dominate the political and economic scene, explained Satter.


Satter then commented on the final stage of the rise of the criminal state in Russia--criminalization. In short, the first cooperatives were established at a time when all property in the Soviet Union belonging to the state was completely unprotected. It was also illegal to have a private security service. Both of these factors made the first Russian businessmen attractive targets for criminals. As the number of independent businessmen grew, the underworld experienced phenomenal growth. With no one to protect them, Russia's new economic elite, composed largely of corrupt insiders, had no choice but to turn to criminal gangs for protection. Eventually, Russian businessmen found gangsters useful in other aspects of business, including curbing the growing epidemic of non-payment of debt.


According to Satter, as these groups became more interwoven, the entire commercial and political apparatus in Russia was poisoned. On a final note, Satter reflected that the only rule in business and political life in Russia continues to be the rule of force and that without the rule of law, Russia has no hope of resurrecting itself.

Yegor Gaidar

GAIDAR: The loans-for-shares deals took place at a time when I hadn't worked in the government for a long time. There were people with more authority, who were responsible for that question. That would be Yeltsin, Chernomyrdin, Anatoly Chubais.

But I discussed that subject, at least with Chubais, many times, and I had my own
understanding of the situation. In my opinion, the major motive at that moment was a political one, connected with providing stability and not allowing the return of communists to power. In 1995, a large portion of the property in Russia belonged to the so-called Red Directors, people who sympathized with the Communist party, who stole money from their enterprises, which they directed badly. And the point was that they were not attracted to the new regime. And if I understand correctly, the loans-for-shares deals were first and foremost directed at creating a critical mass of influential and powerful political forces that would have been vitally interested in not allowing the return of the communist regime. For these deals, we paid endlessly a great deal during the second term of Yeltsin's presidency. Masses of things that we dreamed about, that we could have done in the second term of Yeltsin's presidency, were not done because there was this compromise. A great many characteristically unpleasant features of Russian capitalism today were brought about as a result of that series of compromises. Nonetheless, when, in the intervening years, I asked myself the question: would it have been better to take the risk of the communists coming to power and see what would have happened, knowing what the Communist party was and knowing what Russia was like and knowing how dangerous the situation was for ourselves and for the rest of the world-well, I cannot convince myself that this would have been better.

Criminal capitalism?

YAVLINSKY: Loans-for-shares privatization was a way of creating criminal capitalism in Russia. We learned a very important lesson [in the process], by the way. Karl Polanyi, as you know, wrote a book Open Society and Its Enemies, and he described two main enemies of the open society-fascism and communism. In the last 10 years Russia has found out that open society has one more enemy. That enemy is capitalism that is not limited by laws, by civil institutions, by tradition, by belief, by trade unions, by anything-simply the wild will for profit at any price. That was the key idea of privatization here, that was the key of all changes here.

INTERVIEWER: Yegor Gaidar believes that loans-for-shares privatization was a
necessary evil that helped save the country from the surging communist party.

YAVLINSKY: It's not true, because it's very likely that [those behind the scheme]
were paying the communists to [reinforce this point of view]. It would have been
much better not to pay the communists and to take a different approach. The mob of communists in the country was growing together with the poverty. Communism is a social disease coming from poverty. You can have a lot of disease from poverty. For example, if you have no soap you have a lot of disease. Communism is something like that. If you have a poor society and poverty in the country, you have communists. The reform as these guys were doing it was creating more and more poverty. And the poverty was producing more and more communists. So it was absolutely possible to use a different approach and not to distribute the property between 10 personal friends. There was no need for that. The task was to give the property to millions of people. The [privatizers] were not doing anything for small and middle businesses, and that was one of the key issues. They were all the party of big business. But the big business in Russia was [corrupt] business.

One of the main reasons why in Eastern Europe the reforms were very successful
and in Russia they were not was that in 1991 in Eastern Europe the real democratic revolutions happened. New people came to power. It was a real replacement of the political elite, like it was after the war in Germany and Japan, when the Nazi leaders were completely ripped out and new people came in. The same happened in Eastern Europe after 1991. In Russia it was [different]. The same people changed their jackets and changed the portraits in the rooms, and instead of saying "Communism" and "Lenin" and "five-year plan" started to use "market democracy" and "freedom" as their key words-with the same substance that was with "Lenin" and "Communism" and "five-year plan." They came to power, and you can see: we had Mr. Yeltsin, who was a member of the Politburo, as president of the country. For ten years we had a member of the Politburo as a leader of the country. But we also had 8 or 7 Prime Ministers during the 10 years; all of them were members of the Central Committeeof the Communist Party or representatives of the KGB, with one minor exception of Kirienko, who was a Komsomol leader of his region. So it was the mentality of these people, the approach to life of these people that was the main factor of our failure.

These people hired young economists to present a business card [of reform] to the
world. And they were very successful, because they got about $50 billion in loans
[thanks to] the so-called [economic] dream teams-nice faces speaking English. Mr.
Yeltsin certainly used them, and they brought in money to support the new system.
$50 billion, that's a pretty big number.

INTERVIEWER: What went wrong in Russia's case?

STIGLITZ: Well, there [were] an enormous number of mistakes, one after the other. They began with the shock therapy of liberalization, of eliminating price controls for most of the commodities. The result of that was that there was a massive inflation.

So the high levels of inflation were, in fact, a consequence of the shock therapy
strategy in the beginning. That wiped out the savings of an enormous number of
people. You didn't at that point have any basis of people having wealth to have a
legitimate privatization process. They then had a privatization process that was
corrupt and in which the country's assets were turned over to a few, to the oligarchs.

The strategy was privatization at any cost. Do it quickly, is what the IMF kept telling them. The IMF kept a score card-how many privatizations had you done. But it's easy to privatize, give away the state assets to your friends. And in fact, it's not only easy-it's rewarding, because then they give a little bit of money back to you. So that was the strategy that was advocated and pushed. They then had policies like capital market liberalization before they were ready.

So what did that mean? You had an illegitimate privatization. The people who had
been able to use their political influence to get these billions and billions of dollars of
natural resources for a pittance were then told, Well, you have a choice, keep your
money inside Russia or take it to the United States. United States was having a
boom, Russia, because of the policies, was in a depression. Well, if you were smart
enough to persuade Yeltsin to give these billions of dollars, you were smart enough
to figure out it's better to take your money to the United States or, even better, to
Cyprus, to secret bank accounts, to Switzerland, knowing full well that there'll be a
change in government. When there's a change of government, there'll be a
questioning of whether those privatizations were legitimate. If you had your money in Russia, people might say, we want to do that over again; you effectively stole the country's assets. So the experiences in Russia show that in some sense economists are right: incentives matter. But under the IMF strategy, you put in place incentives that lead to asset stripping rather than wealth creation and to the implosion of the economy rather than to economic growth.

INTERVIEWER: How did this affect the poor in Russia and the average person?

STIGLITZ: A number of things happened that contributed to the increase in poverty. Poverty increased from around two percent to forty percent or more, depending on how you calculate it. [It was] one the most rapid increases in poverty that the world would have seen in that short span of time, apart from a natural disaster. With the tight monetary policies that were pursued and the other policies, firms didn't have the money to even pay their employees. What was tragic about it is while they didn't have enough money to pay their pensioners, to pay their workers, they were giving away the valuable state assets to a few rich people. So in a way, resources were leaving Russia in massive amounts, billions and billions were leaving, with these open capital markets. Russia privatized before they had a good tax system in place.

It's very easy to tax oil, and you can monitor the amount of oil that's being shipped
abroad. It's actually relatively easy. But they privatized it before they put in the
means of taxing this most basic resource of the Russian economy.
And so by not getting the sequencing right, by not pacing right, they lead to the
impoverishment of massive amounts of their people. Then, with the government not having enough revenue, other aspects of life started to deteriorate. They didn't have enough money for hospitals, schools. Russia used to have one of the [best] school systems in the world. Now they didn't have enough money for that. So this began to affect every dimension of people's lives.

Interim outcome of the Russian transition: clan capitalism

"When Postmodernism Came to Russia"

'Political capitalism' and corruption in Russia

U. S. S. R.: The Corrupt Society: The Secret World of Soviet Capitalism

Foreign Affairs - Russia's Phony Capitalism - Grigory Yavlinsky

See:

Yeltsin Schmeltsin

State Capitalism in the USSR

Crisis in the Ukraine

Oligarchs

Ukraine Gases Government

Tags
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