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The Achilles Heel…aka Perils of Privatization

I have previously noted my skepticism of so-called “privatization” of public assets. (I say “so called” because we Americans use the term inaccurately, to mean “contracting out” for goods and services; genuine privatization would involve selling those assets off and letting them succeed or fail in the market.)

Note that the term I use is skepticism, not opposition. There are obviously times and tasks where contracting makes sense. My concern is that government isn’t a very good judge of when and what those are.

A recent post at the Urbanophile illustrates my point (albeit inadvertently). Aaron Renn was an enthusiastic supporter of the Toll Road lease, and an equally ardent opponent of the ill-considered Chicago and Indianapolis parking meter deals. In this post, he uses a considerable amount of data to make a perfectly reasonable point: the devil is in the contracting details. There are good deals and not such good deals.

My skepticism–and that of other critics of “privatization as panacea”–comes from the recognition that contracts with units of government are qualitatively different from contracts between private actors, and those differences make it far more likely that the contracts ultimately negotiated will be unfavorable to taxpayers.

Mayors and Governors who are considering privatization are operating under a different set of incentives than the corporate CEO who is charged with long-term profitability of his business. As the saying goes, long term to a politician means “until the next election.” Typically, the elected official is looking for immediate cash to relieve fiscal stress (and improve his immediate political prospects) and is much less concerned with the extended consequences of the transaction.

Furthermore–although it really pains me as a former Corporation Counsel to admit this–the lawyers who review these deals for government tend to be far less sophisticated than  lawyers acting on behalf of the contractors. That’s not, I hasten to say, because they aren’t good lawyers–many are. But the skills required to advise a municipality or state government aren’t generally the same skills as those whose emphasis is business transaction law.

In addition to the existence of unequal bargaining capacities, there is also—unfortunately—the potential for “crony capitalism,” the temptation to reward a campaign donor or political patron with a lucrative contract at taxpayer expense. (Can we spell Halliburton?)

Ideally, the media will act as a watchdog in these negotiations, alerting the public when a proposed contract is lopsided or otherwise unfavorable. But media has never been very good at providing this sort of scrutiny, because news organizations rarely employ business reporters able to analyze complex transactions. (In today’s media environment, of course, we’re lucky if we even know a deal is in the works.)

So-too often, government contracting pits an officeholder who is focused on short-term gratification and represented by a lawyer unfamiliar with the arcana of business contracting against a savvy contractor looking to lock in long-term advantage who is represented by an experienced lawyer-negotiator.  We shouldn’t be surprised when the resulting transaction is unfavorable to the taxpayer.

Is this lack of parity reason to eliminate government contracting? Of course not. But it is definitely reason to be cautious , and read the fine print, especially when an elected official is trumpeting the great deal s/he just made.

What’s that old saying? If it sounds too good to be true, it probably is.

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Not Exactly Bragging Rights

A recent analysis by the Bloomberg Administration found that New York’s poverty rate held steady since 2000. That makes the Big Apple the only large U.S. city not to see a spike in that rate.

New York’s Center for Economic Opportunity released the survey last Thursday. It used U.S. Census Bureau data from 2000 and 2012, and determined that the nation’s largest city had maintained a 21.2 percent poverty rate during the intervening 12 years.

It also found that poverty rates in the country’s 19 other largest cities increased, on average, by 36 percent. That’s just an average, however. Rates of increase ranged from 3 percent in El Paso, Tex., to 88 percent in Indianapolis.

That’s right: while we’ve been focusing on bright shiny objects like cricket fields and Super Bowls, we’ve had an 88 percent increase in poverty.

If Mayor Ballard has addressed this issue, I haven’t heard about it.

As a friend of mine recently pointed out, Ballard rarely bothers to visit the Statehouse. He was willing to lobby  for elimination of the at-large council seats, a partisan move that increased his political power, but he’s been conspicuously absent on a whole range of issues having a direct impact on the economic well-being of Marion County residents. His support for public transportation was both tepid and a long time coming, despite the fact that–among other things–transportation is desperately needed to improve poor folks’  access to employment opportunities. He’s said nothing about the importance of expanding Medicaid. Yet lack of access to medical insurance is a major cause of poverty, and the recent hospital layoffs that increase local unemployment are a direct result of Pence’s unconscionable  refusal to expand Indiana’s Medicaid program.

Ballard has also said nothing about the recent, draconian cuts to the Food Stamp program despite the fact that the economic impact of Food Stamp dollars flowing to Marion County is equivalent to holding a Super Bowl every four months.

I guess we know where his priorities lie.

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In Praise of (Certain) Republicans

If there is hope for the re-emergence of the Republican Party to which I gave a significant chunk of my adult life, it lies in the actions of seven GOP members of the Indianapolis City-County Council on Monday night.

Republicans Will Gooden, Ben Hunter, Robert Lutz, Janice McHenry, Michael McQuillen, Jeff Miller and Jefferson Shreve joined all of the Democratic council members in support of a resolution urging the Indiana General Assembly to reject HJR6. (For anyone who has spent the last couple of years on Mars, HJR6 would place Indiana’s current statutory ban on same-sex marriage in the state’s constitution, and would add gratuitous language outlawing civil unions and official recognition of anything else creative minds might consider “equivalent” to marriage.)

Six Republicans voted against the resolution, but the future of the GOP–if it has one–lies with the seven who refused to be bullied by activists from the far right fringes.

The capture of one of America’s major political parties by extremists has made governing–and civil discourse– virtually impossible.  It has already made GOP candidates unelectable in urban areas, and caused wholesale defections elsewhere.

Those seven Republicans understand something that too many of those remaining in the Grand Old Party seem to have forgotten: politics isn’t–or shouldn’t be–religion. When every vote becomes a test of moral purity, when every issue is a contest between Good and Evil, when any deviation from Approved Doctrine is blasphemy and anything less than ardent affirmation is evidence that the errant member has gone over to the dark side, what you have isn’t a political party.

It’s a cult.

Kudos to the seven who refused to drink the Kool-aid. May their numbers increase.

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The Times They are A’Changing

Last weekend, my husband and I attended the wedding of City-County Counselor Zach Adamson to his longtime partner Christian Mosberg.

The couple had been married legally the week before, in Washington, D.C., since Indiana does not recognize same-sex marriages, but a second celebration was conducted back home in Indiana. There was a religious ceremony, involving clergy from several faith traditions, and a reception at Talbott Street that doubled as a fundraiser for Freedom, Indiana–the organization formed to fight HJR6.

Indiana culture warriors Micah Clark and Eric Miller would have been in despair; indicators of social and cultural change were everywhere, and it went well beyond the enthusiastic participation of clergy.

The ceremony wasn’t just attended by friends and families, although there were lots of both. The sanctuary was crowded with local politicians from both political parties. The Republican Mayor was there, as were several Democratic and Republican members of the City-County Council. A number of them also came to the reception, where they mingled with the kind of large and diverse group of friends that is one of the great benefits of urban living.

I couldn’t help thinking about the first time I’d been to Talbott Street, back when it was a truly transgressive venue featuring female impersonators and frequented by patrons who were mostly still closeted. My husband and I were both in City Hall at the time, part of the Hudnut Administration, and we’d come to see a friend perform. We were enjoying the show, when I was approached by a young man I recognized as a city employee. He was absolutely ashen-faced. “Please, please,” he said, “don’t tell anyone you saw me here.”

That was approximately 35 years ago–a long time in my life (although the years certainly seem to have sped by) but a ridiculously brief period as social movements go.

It’s no wonder the pronouncements from the “Christian” Right have taken on a shrill and frantic quality. In what seems like the blink of an eye, GLBT folks have gone from a frightened, despised minority to a group of friends and neighbors with whom we are happy to celebrate life’s rites of passage.

Think I’m exaggerating the degree to which attitudes have changed? Yesterday, notoriously timid Indiana University announced it was joining Freedom Indiana.

Indiana’s legislators may be the last to get the memo, but homophobia is so last century!

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One Thing We Can Do

There isn’t much that rational Republicans and Democrats can do about today’s zealots. John Boehner has obviously lost control of both the “suicide caucus’ and his mind. But we can—and should—avoid repeats of this hostage situation created by extremists who owe their elections not to fair elections but to gerrymandering.

In Indiana, the League of Women Voters and Common Cause have launched “Rethinking Redistricting: Drawing a Line for Democracy,” a project designed to ensure that “voters choose their legislators instead of legislators choosing their voters.” They hope to generate a popular movement to amend the Indiana Constitution and require an independent redistricting commission.

A small but important step on the long road back to sanity.

Reform will be difficult. Both parties are invested in the current system. The only way change will occur is in response to a true grass-roots movement, and in order to generate that movement, ordinary citizens will need to understand how the practice of partisan redistricting undermines democratic accountability.

In order to increase public understanding of the problems, “Rethinking Redistricting” plans to conduct a broad educational campaign via “conversation circles,” a time-honored approach to retail politics. Attendees will discuss the most harmful effects of our current system, which virtually ensures that few districts will actually be competitive. (In 2012, only two of Indiana’s Congressional districts were considered competitive.)

When a result is predetermined—when a citizen’s vote is unlikely to affect the outcome—citizens don’t vote. And in Indiana, they don’t. The 2011 Civic Health Index ranked Indiana 48th in the nation for voter turnout.

Worse, with lack of competition comes polarization. Republicans don’t fear Democratic opposition, they fear primary challenges from the Right; Democrats don’t worry about Republicans; they worry about attacks from the Left. The current system thus destroys incentives to work across the aisle, to be reasonable, to negotiate and find acceptable compromises.

The current system has given us the Tea Party debacle we are currently seeing. Thanks to gerrymandering, despite the fact that Democratic candidates for Congress got a million more votes than Republicans in the last election, Republicans retained control of the House. The cost was high: election of 80 Representatives from deep Red districts, drawn to be impervious to competition and thoroughly unrepresentative of the nation as a whole, that comprise what has been dubbed “the suicide caucus.”

Even within today’s radical GOP, they represent a minority view.

According to the Cook Political Report, Representatives in the suicide caucus were elected with fourteen and a half million votes, or twelve percent of the votes cast in the 2012 elections. They represent fifty-eight million constituents—eighteen percent of the population. Seventy-six of them are male, seventy-nine white.

None of them represent the sane American middle.

Call your local League of Women Voters rep, or Julia Vaughn at Common Cause. Host a conversation, call your State Senator and Representative. Let’s do something really radical, and let Indiana voters choose their representatives rather than the other way around.

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