What Drives Me Crazy

A couple of days ago, I got my ever-thinner print version of Newsweek, and began leafing through it. I came to an article by one Niall Ferguson (“Niall Ferguson Solves the Debt Crisis”) I don’t know who Ferguson is, although I’ve seen his name here and there, but obviously, if he has a solution to the “debt crisis,” (the precise nature of which was conveniently undefined), I wanted to know what it was.

And what was it? Privatization, which–he blandly assured readers–“has been a huge success nearly everywhere it’s been tried.”

When I came to that sentence, my husband called from another room to ask me why I was making that strange noise.

Let me explain why Mr. Ferguson’s article made my head explode. I have spent a reasonable percent of my time in academia studying privatization, and have written a number of (peer reviewed) articles on the subject, and it is clear that Ferguson is, shall we say, confused. The first clue is his reference to Margaret Thatcher’s successes. I agree that much of Thatcher’s privatization effort was successful and sound, but what Thatcher called privatization was very different from what Americans mean when we use the term. Thatcher sold off assets (steel mills, for example) that most economists would agree should never have been owned by government in the first place. And she sold them, to private owners who were left to own and operate them, pay taxes on any profits, and go under if they failed. These assets were no longer on the British government’s balance sheets, for good or ill.

This is significantly different from the situation in the United States, for two reasons. First of all, we were never socialized to the extent that England and many European countries were, so our governmental units–with very few exceptions–do not own property that is extraneous to the mission of government. We don’t have publicly owned steel mills or coal mines or other assets more appropriate to private ownership to sell off. Ferguson cites Mitch Daniels’ “lease” of Indiana’s public highways with approval; I think many of us would argue that public roads are hardly in the same category as steel mills.

That allusion to Indiana’s Toll Road brings us to the second difference between British and American practices: what we call privatization in the U.S. isn’t really privatization. We use the term to mean “contracting out.” If we have potholes to fill (and right now, boy do we!) we ask private asphalt companies to bid on filling them–we don’t expect government to manufacture its own asphalt and use its own employees to do the job–but we don’t expect government to sell the streets and allow the market to determine which ones get paved, either.

I didn’t intend to turn this post into an academic lecture/rant, but I get so tired of pompous pundits who don’t bother to do any homework, who don’t bother to define their terms, blandly prescribing simple fixes for complicated issues they clearly do not understand.  If Ferguson is advocating that we sell off government assets, he needs to distinguish such outright sales from the “leases” and “contracts” that Americans are familiar with, and he needs to identify the assets that he believes should be privately rather than publicly owned. (I’d be quite willing to sell off sports stadiums, but I’d fight a proposed sale of libraries.) If we ever have that discussion, I think it is highly unlikely that we’d find enough stuff to sell to retire the national debt.

And just for Mr. Ferguson’s information, privatization (defined as contracting out) has not been a “success nearly everywhere.” I’d be happy to supply him with citations to multiple studies demonstrating quite the contrary–but somehow I doubt he’d be interested.

Who said “It ain’t what you don’t know that hurts you, it’s what you know that just ain’t so”?

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If You Can’t Say Something Nice…….

I’ve got to say, events of these last few months have really put a strain on my mother’s admonition that “If you can’t say something nice, then don’t say anything at all.”

Okay–let me try. The Indiana legislature did take a (hesitant) step toward rational policy-making by setting up a committee to study marijuana prohibition. It’s only a study committee, but it is implicit recognition of the fact that our drug war policies are costly and counterproductive. That’s a good thing.

Problem is, so far as I can tell, it’s the only good thing that has happened during this legislative session.

  • At a time when poll after poll finds job creation at the top of the list of voter concerns, the GOP majority has been fixated on restricting abortion,  prohibiting   same-sex marriage, union-busting and immigrant bashing.
  • Despite all the verbal hand-wringing about the state’s fiscal problems, the legislature refused once again to eliminate Indiana’s 1008 wasteful, unnecessary and expensive Townships.
  • The war on public education may be well-intentioned (to give lawmakers the benefit of the doubt), but it is anything but informed. One small example: the effort to link teacher pay to student achievement. Sounds reasonable–if you don’t understand the situation.  The likely result would be to discourage good teachers from teaching in schools with lots of poor kids, since available research links student performance to parental income. (There are ways of measuring achievement that control for socio-economic status, but somehow I don’t think that’s what our genius legislators intend.)

    I have a student who is interning at the State Senate. His account of the “discourse” (note quotes) in that august chamber are dispiriting, to say the least. To date, my favorite is the statement made by Senator Ron Alting during discussion of Delph’s anti-immigration bill. Alting began by saying that the legislation would damage Indiana’s reputation; he also recognized that it would hurt economic development and our convention business, saying “we will be impacted like Arizona.” His conclusion? “So be it. I’ll vote for it.”

    Just kill me now.

    State Workers Pay Taxes Too

    During a discussion the other day, a SPEA staff member made a point that seems to be lost in the contending, highly ideological arguments about the standoff in Wisconsin. She noted that public employees are also taxpayers, and that the Governor’s insistence that he is acting in the “interests of the taxpayers” didn’t seem to include the interests of that particular subset of taxpayers.

    Her observation has just been quantified and amplified by Robert Russell, a Wisconsin state economic analyst, who pointed out that state workers are not only taxpayers, but consumers.

    According to Russell, if public employee salaries are cut through increased withholdings as Walker is proposing, by an amount large enough to fill the $137 million budget gap, the resulting drop in consumer spending will lead to: 1) a loss of over 1,200 nongovernment jobs; 2) a loss of about $100 million in business sales statewide; 3) a loss of nearly $35 million in personal incomes of nongovernment employee households; and 4)  a loss of nearly $10 million in state tax revenues.

    This is not about economics. (Indeed,  Governor Walker seems blissfully ignorant of basic economics.) It’s about ideology, hubris, and political payback.

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    I Really Have to Stop Reading the News…

    It isn’t even light yet, and I’ve already read stories that make me want to crawl back into my bed and pull the covers up over my head.

    In national news, the Southern Poverty Law Center has released a new study showing a dramatic rise in hate groups–especially anti-government, “patriot” groups. And closer to home, Mother Jones reports that

    On Saturday night, when Mother Jones staffers tweeted a report that riot police might soon sweep demonstrators out of the Wisconsin capitol building—something that didn’t end up happening—one Twitter user sent out a chilling public response: “Use live ammunition.”

    From my own Twitter account, I confronted the user, JCCentCom. He tweeted back that the demonstrators were “political enemies” and “thugs” who were “physically threatening legally elected officials.” In response to such behavior, he said, “You’re damned right I advocate deadly force.” He later called me a “typical leftist,” adding, “liberals hate police.“

    Only later did the reporter realize that JCCentCom was a deputy attorney general for the state of Indiana.

    Apparently, this Deputy AG–one Jeff Cox–has been communicating similar messages for most of the ten years he has been employed by the people of Indiana to uphold the rule of law. The Mother Jones article contains more quotations, along with his defense that he has a First Amendment right to express his opinions.

    I don’t debate his right to voice opinions (although a semanticist might quibble on the grounds that infantile name-calling can hardly be dignified by the term “opinion”). I do wonder what sort of “logic” fails to recognize that the protesters also have First Amendment rights, or that he is one of the “public workers” being vilified by people like Governor Walker and…Jeff Cox.

    I also wonder what kind of job performance the people of Indiana have been getting from someone so intemperate and lacking in judgment. Those aren’t exactly the qualities that make for good lawyering.

    Perhaps he would be better suited to a job defending some of those “patriots” the Poverty Law Center identified.

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    Beyond Redemption

    According to Political Animal , a few weeks ago, former senator and former U.S. Ambassador to the United Nations John Danforth (R) expressed some concern about the direction of his party. “If Dick Lugar,” Danforth said, “having served five terms in the U.S. Senate and being the most respected person in the Senate and the leading authority on foreign policy, is seriously challenged by anybody in the Republican Party, we have gone so far overboard that we are beyond redemption.”

    I think we’ve crossed that threshhold.

    Only in an alternative universe would Dick Lugar be considered liberal, or Richard Mourdock–the troglodyte running against him–be considered credible.

    When Lugar was Mayor of Indianapolis, he governed from the middle, but since his first term in the Senate, he has moved steadily to the right. He has routinely voted against equal rights for gay people, including most recently against repeal of “Don’t Ask, Don’t Tell,” and he has been on the wrong side (in my view) on health care reform. He carried a lot of water for the  Bush Administration, despite the fact that he had to know how misguided its foreign policies were.   If he seems “liberal,” it is only by comparison to people who are certifiably insane–the people who want to build fences along the (southern) border, want to put women back in the kitchen (barefoot and pregnant), and want the U.S. to withdraw from all international treaties.

    Mourdock is best known for an embarrassing lawsuit arising out of the Chrysler bankruptcy. After making an ill-advised investment in Chrysler stock, he was Indiana’s representative to the creditors committee–the group of creditors who negotiate in the bankruptcy proceedings on behalf of those owed money. Mourdock signed an agreement to abide by whatever agreement the committee reached; nevertheless, he made a lot of noise objecting to the agreement after the court approved it, and he brought a lawsuit to overturn it. The suit was thrown out, as any first-year law student would have anticipated, but the most ironic aspect of the whole mess was that Indiana would have received less had his lawsuit been successful than it received under the creditors’ agreement. Now this clown is playing to the Tea Party wing of the party–where he clearly belongs.

    In a sane world, Lugar would have no problem winning a Republican primary, but this isn’t a sane world. There are a lot of frightened, angry voters out there, and most of them are members of the GOP. Plus, friends who are privy to the party’s powers-that-be tell me that the once-vaunted Lugar office staff no longer responds to constituent contacts or party requests the way they used to. (The words “insulated” and “arrogant” come up fairly routinely.)

    I hope the Democrats field a strong candidate–something they haven’t done for quite a while–because we are witnessing the implosion of a once-powerful political party that may indeed be beyond redemption.

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