Public Policy and Governance – Page 221

A Hoosier Cautionary Tale

First Kansas. Now Indiana. One by one, the pillars of conservative fundamentalism are failing real-world tests.

Under then-Governor Pence, Indiana negotiated a much-ballyhood 35-year “public-private partnership” with the Spanish firm Insolux Corsan to build and maintain a portion of Interstate 69, between Bloomington and Indianapolis. The project has dragged on and on, making trips between Bloomington and Indianapolis slow and treacherous. (I know this from personal experience; faculty of IU routinely make the trip between campuses, and I’ve done my share of cursing while in transit.)

The original contract called for a completion date of October, 2016; that date has been pushed back four times amid media reports suggesting that the state’s private partner was as slow in paying subcontractors as it was in building the highway. Now, it appears the contractor is going bankrupt. The Indianapolis Star reports that the state “intends to take control of the troubled I-69 project from Bloomington to Martinsville as the public-private partnership used to finance and build the highway crumbles.”

It is a GOP article of faith that the private sector is always more efficient and more competent than government, and that contracting out–privatization–saves money. In the uncongenial place called the real world, it seldom works out that way. The collapse–or “crumbling”–of this particular partnership joins a long line of failed privatization schemes, some scandalous and corrupt, many simply ineffective and expensive, that have ended up costing taxpayers more than if government had done the job.

This isn’t to say that contracting out is always a bad idea. As I’ve said repeatedly, the issue isn’t whether to work with the private sector, but when and how. Public officials need to carefully evaluate proposed contracting arrangements: is this something government routinely does, or an unusual task requiring specialized expertise that the agency doesn’t have? If the motive is saving money, how realistic is that? (After all, private entities have to pay taxes, and their bids will reflect that expense.) Does the contracting agency have the expertise needed to properly negotiate the contract and monitor the contractor? Have all the risks been weighed, and due diligence exercised?

Do the officials making the decision recognize that contracting with a third party won’t relieve the government agency of its ultimate responsibility to see that the project is properly completed or the service is properly rendered?

Are there situations where public-private partnerships are both appropriate and competently structured? Of course. The Brookings Institution recently reported on the success of the Copenhagen City and Port Development Corporation in revitalizing Copenhagen’s waterfront. I was particularly struck by this description of that effort:

The approach deploys an innovative institutional vehicle—a publicly owned, privately run corporation—to achieve the high-level management and value appreciation of assets more commonly found in the private sector while retaining development profits for public use.(emphasis mine)

Two elements of this particular partnership stand out: (1) it was formed to execute a lengthy, difficult and highly complex project requiring skills that few municipal governments have in-house; and (2) it distributed risk and reward in a way that ensured taxpayers would benefit financially from the project’s success.

In contrast, virtually every American contract I’ve seen has socialized the risk and privatized the reward; that is, taxpayers have assumed the risks of cost overruns, unanticipated problems and project failures, while the private contractors have reaped the lions’ share of the profits.(Trump’s infrastructure plan–to the extent it exists–would take that formula to new heights. Or lows…)

I69 and the Indianapolis parking meter fiasco are just two of the more recent examples of what happens when privatization is a mantra–a semi-religious belief–rather than one of several strategically deployed tools in the public toolbox.

Personal P.S. Thanks to all of you who posted good wishes for my husband’s surgery. All went well, and he’s home (with a very rakish temporary eye patch).

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Thoughts on the Comey Hearing

Today’s post will be brief because my husband is having a surgical procedure this morning (outpatient and cringe-worthy, since it requires cutting into his eyeball, but not major or life-threatening). I’ll return, undoubtedly in full verbose mode, tomorrow.

I have very little to add to the mountains of commentary that issued before, during and after Comey’s testimony. I’m not a criminal lawyer, was never a prosecutor (when I did practice law, I drafted contracts and mortgages and articles of incorporation), so my grasp of the fine points of obstruction of justice law is worse than imperfect.

With those caveats, a couple of observations:

Love him or hate him, James Comey is a professional with a reputation for integrity. He understands how to navigate Washington and how to speak to a camera, and his calm professionalism was on consistent display. His responses were forthright, but never exaggerated or over-reaching. He was neither defensive nor evasive. His entire performance was impressive.
The question whether Trump engaged in obstruction of justice will inevitably require interpreting the President’s statement to Comey that he “hoped” the investigation of Flynn could be dropped. Senator Risch questioned whether a Presidential “hope” could really be considered a directive, although Comey responded that–given the context–he took it to be. Both Times reporter Charlie Savage and Senator Angus King responded with the perfect analogy: “I hope” is like the famous line Henry II uttered about Thomas Becket, which his minions understood to be a direction to murder him: “Will no one rid me of this turbulent priest?”
Senator John McCain has passed his “sell by” date.
Judging from the reactions of Paul Ryan and other luminaries of what passes for the Republican party these days, patriotism of the sort displayed by Eliot Richardson, William Ruckleshaus, then-Senator Barry Goldwater and others during Watergate is long gone. It evidently eloped with those other bygone qualities, honor and integrity.

The United States placed a dangerously ignorant, clearly incompetent, unstable man in the Oval Office. We’ve known that. What we didn’t know, and are slowly discovering, is the degree to which the members of his party value power over country.

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Even Toto Is Leaving Kansas

Not that it will make any difference to the ideologues for whom evidence is irrelevant, but Republicans in Kansas have now thrown in the towel on the nation’s most wholehearted effort to prove that lower taxes generate higher state revenues.

As the Washington Post headline put it, “Kansas Republicans Raise Taxes, Ending Their GOP Governor’s ‘Real Live Experiment’ in Conservative Policy.”

Kansas Governor Sam Brownback is a supply-side “true believer,” who made draconian tax cuts after assuming office in 2010, and waited with anticipation for the state’s economy to grow in response. That growth failed to materialize during his first term, but he was re-elected, and he continued stubbornly waiting–still a true believer– as Kansas’ deficit grew to over a billion dollars and basic services were cut. Education, mental health, healthcare–all took huge hits.

Members of his own party called for an end to the “experiment,” and joined Democrats in passing a bill to increase taxes. Brownback vetoed it. The legislature subsequently overrode that veto; in the end, eighteen of the state’s 31 GOP senators and 49 of the 85 Republican members of the House voted against the governor.

Under Brownback, as has been widely reported, the pace of economic expansion in Kansas has consistently lagged behind that of the rest of the country. What is particularly telling is the very different experience of Minnesota, where a Democratic Governor elected at the same time as Brownback raised taxes and substantially increased education spending, and where by 2015 there were multiple reports like this:

Since 2011, Minnesota has been doing quite well for itself. The state has created more than 170,000 jobs, according to the Huffington Post. Its unemployment rate stands at 3.6% — the fifth-lowest in the country, and far below the nationwide rate of 5.7% — and the state government boasts a budget surplus of $1 billion. Forbes considers Minnesota one of the top 10 in the country for business.

Despite the fact that Brownback’s experiment in Kansas has failed so spectacularly, its tax cuts remain the blueprint for the Trump Administration and for “true believers” like Paul Ryan. As the Post article puts it,

The principles Trump endorsed during the campaign and in the early stages of his presidency are broadly similar to those enacted in Kansas. As Brownback did, Trump has proposed bringing down marginal rates, getting rid of brackets and giving a new break to small businesses.

That is no coincidence, since Brownback is well connected to the Republican policymaking establishment in Washington. Trump and Brownback have shared economic advisers, and when Brownback was a U.S. senator, Rep. Paul D. Ryan (R-Wis.), now the speaker of the House, served as his legislative director.

There’s a pattern here.

Today’s Republicans–unlike the sober and prudential members of the party to which I once belonged–are simply impervious to evidence.

They continue to insist that raising the minimum wage will depress employment, ignoring the fact that cities that have raised the wage have seen job growth and increased economic activity.

They ignore rigorous studies by (genuine) conservatives showing that so-called “welfare reform”–far from being a great success, as they routinely proclaim –has diverted funds from programs to help struggling Americans (who are, if anything, worse off) and used the money to plug state budget holes and compensate for tax cuts for the wealthy.

They stubbornly insist that tax cuts will generate economic growth, and that their repeated, demonstrable failure to do so is because we just haven’t cut deeply enough, or waited long enough.

These are the same people who dismiss climate change as a hoax, but tell us that if it turns out to be real, God will take care of it. They’re the same folks who agree with Jeff Sessions that the drug war would work if we’d just increase the penalties for smoking weed.

With these people, ideology consistently trumps experience. (What are you going to believe? Conservative political doctrine or your lying eyes?)

I’m beginning to think these people would go to a doctor who told them what they wanted to hear even if that doctor’s patients all died…

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Speaking of “Fake News”…

Well, well….

Despite all his fulminating about “fake news,” it appears that our President–whose definition of “fake” is any coverage (covfefe??) he doesn’t like–isn’t above generating some fakery of his own.

Remember Trump’s preening over his massive, multi-billion dollar “deal” with Saudi Arabia? Bruce Reidel of The Brookings Institution reports that no such deal exists.

Last month, President Trump visited Saudi Arabia and his administration announced that he had concluded a $110 billion arms deal with the kingdom. Only problem is that there is no deal. It’s fake news.

I’ve spoken to contacts in the defense business and on the Hill, and all of them say the same thing: There is no $110 billion deal. Instead, there are a bunch of letters of interest or intent, but not contracts. Many are offers that the defense industry thinks the Saudis will be interested in someday. So far nothing has been notified to the Senate for review. The Defense Security Cooperation Agency, the arms sales wing of the Pentagon, calls them “intended sales.” None of the deals identified so far are new, all began in the Obama administration.

In my ethnic group, this is what we call chutzpah. (Chutzpah is sort of like nerve or gall, but on steroids. The standard example is the guy who kills his mother and father and then throws himself on the mercy of the court because he’s an orphan.)

It appears that the “Art of the Deal” braggart, the guy who “makes the best deals,” lied through his teeth again, this time about a huge transaction that doesn’t exist–and to the extent it may exist in the future, it was initiated by his “Kenyan” predecessor.

As Reidel also notes,

Moreover, it’s unlikely that the Saudis could pay for a $110 billion deal any longer, due to low oil prices and the two-plus years old war in Yemen. President Obama sold the kingdom $112 billion in weapons over eight years, most of which was a single, huge deal in 2012 negotiated by then-Secretary of Defense Bob Gates. To get that deal through Congressional approval, Gates also negotiated a deal with Israel to compensate the Israelis and preserve their qualitative edge over their Arab neighbors. With the fall in oil prices, the Saudis have struggled to meet their payments since.

Reidel isn’t above snark: he says we’ll know the Trump deal is real when Israel begins to ask for money to keep the Israeli Defense Forces’ qualitative edge preserved.

A deal that evidently is coming is a munitions sale to the Royal Saudi Air Force, which will enable the Saudis to continue air bombardment of Yemen, the Arab world’s poorest country.

Finally, just as the arms deal is not what it was advertised, so is the much-hyped united Muslim campaign against terrorism. Instead, the Gulf states have turned on one of their own. Saudi Arabia has orchestrated a campaign to isolate Qatar. This weekend Saudi Arabia, the UAE, Bahrain, and Egypt broke relations with Qatar. Saudi allies like the Maldives and Yemen jumped on the bandwagon. Saudi Arabia has closed its land border with Qatar.

This is not the first such spat but it may be the most dangerous. The Saudis and their allies are eager to punish Qatar for supporting the Muslim Brotherhood, for hosting Al-Jazeera, and keeping ties with Iran. Rather than a united front to contain Iran, the Riyadh summit’s outcome is exacerbating sectarian and political tensions in the region.

The Middle East has long been the world’s most dangerously unstable area. Now we have put management of the tensions generated there in the hands of the most dangerously unstable person ever to occupy America’s Oval Office–a man who has no ability to distinguish between reality and ego gratifying bullshit.

What could possibly go wrong?

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We Aren’t Number One…Not Even Close

Donald Trump is accelerating America’s retreat from the world stage, illuminating our national flaws and demonstrating the contradictions between our aspirations and our performance.

Let’s be honest: a nation that could elect this ignorant, unstable man is a nation seriously in decline. If we are really prepared to be honest, we will also concede that America’s social and racial divisions, extremes of inequality and lack of anything approaching an adequate social safety-net aren’t exactly attributes that confer bragging rights, either.

A prime example is our overpriced and underperforming health care system, which our Congressional overlords are eager to make even worse. How long can intellectually dishonest pundits and politicians keep a straight face while peddling the myth that American medical care is “the best in the world”–that “we’re number one”?

The truth is that, if you are very wealthy or have exceptionally good insurance, you can get extremely good care for serious illnesses in the United States. If you don’t fall into one of those categories, not so much. And if you are an average American with a treatable ailment–or an ailment that should be treatable– your prospects are even worse.

Over at Dispatches from the Culture Wars, Ed Brayton reports on yet another in a long line of studies ranking national healthcare systems.

A new study that looks at the effects of highly treatable diseases, ones for which greater access to continual medical care can mean the difference between life and death, finds that the American health care system lags behind much of the developed world.

There are a number of ways to evaluate healthcare systems, but if you are measuring outcomes over a country’s population, rather than touting cutting-edge therapies available only to the privileged few, the U.S. has long lagged other industrialized countries.

Christopher Murray, a researcher at the University of Washington, and his collaborators looked at 32 causes of death in 195 countries from 1990 to 2015 to create a health-care quality index they used for rankings. Murray described the findings as “disturbing.”

“Having a strong economy does not guarantee good health care,” he said. “Having great medical technology doesn’t, either. We know this because people are not getting the care that should be expected for diseases with established treatments.”…

As might be expected, many highly developed nations, such as Norway, Australia and Canada, scored well. Those in more-remote areas in sub-Saharan Africa, South Asia, Latin America and the Caribbean scored poorly…

The United States measures well for diseases preventable by vaccines, such as diphtheria and measles, but it gets almost failing grades for nine other conditions that can lead to death. These are lower respiratory infections, neonatal disorders, non-melanoma skin cancer, Hodgkin’s lymphoma, ischemic heart disease, hypertensive heart disease, diabetes, chronic kidney disease and the adverse effects of medical treatment itself.

The United States spends enormously more for medical care than any other country–twice as much per capita has the next most expensive system. We just spend our dollars in the least efficient ways possible: multiple non-standard insurance forms, laws that prohibit government agencies from negotiating drug prices, and private insurers whose high overhead costs include everything from marketing to sky-high management salaries and corporate jets. (Medicare’s overhead runs about 3% in contrast to 24-26% for private insurance companies.)

Obamacare is far from perfect (what we really need is “Medicare for All”), but its passage did represent a move in the right direction–and an acknowledgement that access to healthcare is a human right, not a consumer good to be made available only to those with sufficient disposable income. But rather than working to improve it with “fixes” that are fairly simple and obvious, the White House and the Congressional GOP consistently sabotage it, most recently by threatening to end crucial Affordable Care Act payments to insurers. Politico has reported on the move, and the fact that it would guarantee huge premium increases, the withdrawal of insurers from the O-Care markets, and generally cause chaos across the individual health insurance marketplace.

It’s enough to make you think American policymakers put a higher priority on the bottom lines of Big Pharma and Big Insurance than they do on the health of average citizens.

But then, what do we expect when we elect people so corrupt and self-serving they don’t even care about the health of the planet their children and grandchildren will inherit?

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