Tag Archives: government

The Perils Of Privatization

According to the Washington Post, Elon Musk and the Trump Administration are hauling out an “oldie but goodie” and promising that once they’ve hollowed out the federal government’s capacity to govern, they’ll turn any functions they deem necessary over to the private sector. They’ll privatize for “efficiency.”  What could possibly go wrong?

Let me count the ways.

I spent a fair amount of my academic career researching what folks on the Right misleadingly call “privatization.” The first thing you need to know is that calling what Trump and Musk want to do “privatizing” is a misnomer. When Margaret Thatcher sold off government-owned industries to the private sector–where they made or lost money, paid taxes, and were left to sink or swim–that was privatization. In the U.S., the term is used to mean contracts between a government agency and a business or nonprofit organization to provide a government benefit or service. Government continues to pay for that service or benefit with tax dollars, and government remains responsible for its proper delivery.

Sometimes, contracting out makes sense. Sometimes it doesn’t. (It also shouldn’t be confused with procurement— government’s purchase of goods and services from the private market.)

Contracts with units of government are qualitatively different from contracts between private actors, and those differences make it far more likely that the “privatization” contracts ultimately negotiated will be unfavorable to taxpayers. Contracting out first became a fad at the state and local level some twenty-plus years ago, and the results weren’t pretty.

As I wrote back in 2013, 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. 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 reviewed these deals for local governments tended to be far less sophisticated than  lawyers acting on behalf of the contractors. That’s not because they aren’t good lawyers–most are. But the skills required to advise a municipality or state agency aren’t generally the same skills as those needed by practitioners of business transaction law.

In addition to the existence of unequal bargaining capacities, there is also—unfortunately—the very high potential for “crony capitalism,” the temptation to reward a campaign donor or political patron with a lucrative contract at taxpayer expense. Back in the bad old days, patronage meant that you volunteered for the party and if your party won, you–or maybe your brother-in-law–got a job with the city or state. With “privatization,” patronage meant that you made a meaningful contribution to the party and if it won, you got a cushy contract.

Ideally, the media would 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.)

In that 2013 post, I warned that we shouldn’t be surprised when these transactions turn out to be unfavorable to the taxpayer–and in the years that followed, a great many of them proved to be very unfavorable indeed. (For one thing, it turned out that too many government agencies lacked the capacity to effectively monitor contractors.)

Worse, from an accountability standpoint, when services are delivered by an intermediary, citizens often fail to realize that those services are really being provided by government. That failure has constitutional as well as political implications. Only government can violate an individual’s civil liberties–that’s what lawyers call “state action”–so it’s important that we be able to distinguish actions taken by private actors from those that can be attributed to government. Privatization has significantly muddied that distinction.

Also, when contracting is extensive, it masks the true size of government. Today, there are approximately 3.7 million contract employees in addition to 2.1 million civil servants. Only the latter are being targeted by Musk.

Will the public fall for this replay of an expensive and discredited “reform”? Hopefully, our earlier, extensive negative experience with privatization will prevent folks from falling for this again, but as we know, simple prescriptions sell.

The plutocrats are undoubtedly salivating….

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The Work Of Governing

An unfortunate side-effect of Americans’ fascination with celebrity is their accompanying confusion of fame with competence. That inability to understand the difference–especially when it comes to political campaigns– is largely a result of widespread ignorance of the day-to-day grunt-work of governing.

John Sweezy, the long-ago (now deceased) Republican chairman of my county party used to say that every citizen should be required to serve two years in government, and prohibited from staying for more than four years. While I disagreed with his four-year edict, I completely understood the benefit of a two-year stint that would introduce citizens to the distinctly unglamorous realities involved.

I served as Corporation Counsel in Indianapolis for a bit over two years, many–many–years ago, and it was an education. I was disabused of the then-widespread notion that civil servants were largely folks who couldn’t find private sector jobs–my co-workers were some of the brightest and most hard-working people I’ve ever known. Most of all, I came to understand the realities of government service, along with the difficulties of weighing competing public interests.

In one of her recent Letters from an American, Heather Cox Richardson illuminated those lessons by recalling the efforts that averted a threatened Y2K calamity.

When programmers began their work with the first wave of commercial computers in the 1960s, computer memory was expensive, so they used a two-digit format for dates, using just the years in the century, rather than using the four digits that would be necessary otherwise—78, for example, rather than 1978. This worked fine until the century changed.

As the turn of the twenty-first century approached, computer engineers realized that computers might interpret 00 as 1900 rather than 2000 or fail to recognize it at all, causing programs that, by then, handled routine maintenance, safety checks, transportation, finance, and so on, to fail. According to scholar Olivia Bosch, governments recognized that government services, as well as security and the law, could be disrupted by the glitch. They knew that the public must have confidence that world systems would survive, and the United States and the United Kingdom, where at the time computers were more widespread than they were elsewhere, emphasized transparency about how governments, companies, and programmers were handling the problem. They backed the World Bank and the United Nations in their work to help developing countries fix their own Y2K issues.

Those of us who were adults in the run-up to the turn of the century still remember the dire warnings. Planes would fall out of the sky, computers would fail to work, the funds in your bank account would be inaccessible…on and on. Preachers of some religions predicted the end times.

None of that happened, not because the threat was unfounded, but because public servants worked for many months to correct the problem. As Richardson wrote,

In fact, the fix turned out to be simple—programmers developed updated systems that recognized a four-digit date—but implementing it meant that hardware and software had to be adjusted to become Y2K compliant, and they had to be ready by midnight on December 31, 1999. Technology teams worked for years, racing to meet the deadline at a cost that researchers estimate to have been $300–$600 billion. The head of the Federal Aviation Administration at the time, Jane Garvey, told NPR in 1998 that the air traffic control system had twenty-three million lines of code that had to be fixed.

Richardson followed her description of the problem and its solution with what I will label “the moral of the story.”

Crises get a lot of attention, but the quiet work of fixing them gets less. And if that work ends the crisis that got all the attention, the success itself makes people think there was never a crisis to begin with. In the aftermath of the Y2K problem, people began to treat it as a joke, but as technology forecaster Paul Saffo emphasized, “The Y2K crisis didn’t happen precisely because people started preparing for it over a decade in advance. And the general public who was busy stocking up on supplies and stuff just didn’t have a sense that the programmers were on the job.”

I don’t know how to make the majority of American voters understand that when they cast a ballot, they need to vote for someone with the skills or background to understand the job–someone who is competent to fix the sorts of problems governments encounter. When they vote for an entertainer, or culture warrior, or “outsider” who proudly claims to know nothing about politics or government, they get what they vote for–and governing suffers.

After all, most of us wouldn’t choose a doctor who’d never been to medical school…

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I Repeat Myself

A reader recently asked me to repeat a previous column explaining why calls to run government like a business misunderstand the nature of both. I found it–it was from late 2016–and I agree that in the era of Musk and his “government efficiency department,” it’s once-again timely. It was called “The Business of Government.”

______________

Americans like to believe that government should be run like a business. That belief–pernicious and naive– helped elect Donald Trump, and its persistence is evidence (as if any additional evidence is needed) of the public’s profound lack of civic literacy.

Should government be run in a businesslike fashion? Of course. Is managing a government agency “just like” managing a business? Not at all.

A former colleague recently shared an article addressing the differences between business and government. Addressing the myth that anyone who can run a successful business can manage government, the author noted

This is not a 21st-century — or even a 20th-century — phenomenon. In a classic 1887 article, Woodrow Wilson, then a professor at Princeton University, maintained that there was a “science of administration” — arguing, in effect, that there were principles of management that transcended the context in which they were applied. “The field of administration is a field of business,” wrote Wilson. “It is removed from the hurry and strife of politics.”

Later observers and scholars of public administration thoroughly discredited this notion. The pithiest statement on the topic came from Wallace Sayre of Columbia University, who argued in 1958 that “public and private management [were] fundamentally alike in all unimportant respects.” In 1979, Graham Allison, then dean of the Kennedy School of Government at Harvard, used Sayre’s comment as a launching point from which to examine similarities and differences. He noted that both private firms and governments must set objectives, develop plans to achieve those objectives, hire people and direct them toward the achievement of objectives, and manage external environments. But he observed that the way in which these things occur is often fundamentally different from one sector to another.

The article lists some of the important ways in which private enterprises differ from public ones.

Government is about this thing called the “public interest.” There is no such animal in the private sector. Private firms care about their stakeholders and customers; they do not generally care about people who do not invest in their businesses or buy things from them. Thus, accountability is by necessity much broader in government; it is much more difficult to ignore particular groups or people.

Private-sector performance is measured by profitability, while performance measurement in government focuses on the achievement of outcomes.

Compromise is fundamental to success in the public sector. No one owns a controlling share of the government…. The notion of a separation of powers can be anathema to effective private management. It is central to the design of government, at least in the United States.

Government must constantly confront competing values. The most efficient solution may disadvantage certain groups or trample on individual or constitutional rights. In the private sector, efficiency is value number one; in government, it is just one of many values.

Government has a shorter time horizon. In government, the long term may describe the period between now and the next election. Thus there is a strong incentive to show relatively immediate impact.

Government actions take place in public, with much scrutiny from the press and the public. There is no equivalent of C-SPAN showing how decisions are made in the corporate boardroom. Corporate leaders do not find it necessary to explain their every decision to reporters or even to employees.

When corporate executives are elected to run cities or states, they often expect to operate as they did in their companies, where they made the decisions and others obediently carried them out. But legislative bodies–even those dominated by the political party of the chief executive–are not “minions.” They too are elected officials, and they bristle (rightly) when a mayor or governor or president presumes to issue orders. Successful relations between the legislative and executive branch require negotiation, diplomacy and compromise–and those aren’t management skills generally found among corporate CEOs.

Trump and most of his cabinet nominees lack any government experience. Most also lack any education relevant to the missions or operations of the agencies they have been tapped to lead. They don’t know what they don’t know.

And it has become quite obvious that the concept of “the public interest” will be new to all of them….

____________________-

As we prepare for Trump II, nothing in those last two paragraphs has changed…..

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That GOP Retreat From Reality

Watching the Republican Party morph into a cult has been extremely demoralizing–especially to the millions of sane Americans who once called that party home. I have detailed many aspects of the spiraling lunacy–the denial of climate change, the efforts of Christian Nationalists to neuter the First Amendment, the failure to admit that Donald Trump is mentally-ill and getting worse–basically, the Republican insistence on “facts” that are demonstrably untrue.

A recent editorial by Thomas Edsall in The New York Times explores yet another aspect of the GOP’s increasing retreat from reality: science denial.

In “The Polarization and Politicization of Trust in Scientists,” a paper presented last week at the annual meeting of the American Political Science Association, James Druckman and Jonathan Schulman of the University of Rochester and the University of Pennsylvania wrote:

Consider in 2000, 46 percent of Democrats and, almost equivalently, 47 percent of Republicans expressed a great deal of confidence in scientists. In 2022, these respective percentages were 53 percent and 28 percent. In 20 years, a partisan chasm in trust (a 25-percentage-point gap) emerged.

Edsall quoted Matthew Dallek, a political historian at George Washington University, who warns that distrust of science is “arguably the greatest hindrance to societal action to stem numerous threats to the lives of Americans and people worldwide.” As he pointed out, Americans died because they had been led to believe that mRNA vaccines were more dangerous than a bout of Covid.

Donald Trump’s MAGA movement, Dallek argued, turbocharged anti-science conspiracy theories and attitudes on the American right, vaulting them to an even more influential place in American politics. Bogus notions — vaccines may cause autism, hydroxychloroquine may cure Covid, climate change isn’t real — have become linchpins of MAGA-era conservatism.

Edsall argues that the roots of Republican science denial go back at least 50 years, to the creation of the Environmental Protection Agency, the Occupational Safety and Health Administration, and passage of the  Clean Air and Clean Water Acts.

These pillars of the regulatory state were and still are deeply dependent on scientific research to set rules and guidelines. All would soon be seen as adversaries of the sections of the business community that are closely allied with the Republican Party, although each of these agencies and laws was backed by a Republican president, Richard Nixon.

These regulatory efforts made science a part of political debates, since federal agencies like the E.P.A. and OSHA “are considered adversarial to corporate interests. Regulatory science directly connects to policy management and, therefore, has become entangled in policy debates that are unavoidably ideological.”

Edsall quoted an academic article that found antipathy to science taking hold during the Reagan administration, “largely in response to scientific evidence of environmental crises that invited governmental response. Thus, science — particularly environmental and public health science — became the target of conservative anti-regulatory attitudes.”

Republican distrust of science became far more prevalent when an ascendant religious right began its takeover of the GOP. Religious fundamentalists supported creationism over evolution, and religious and political skepticism of science became “mutually constitutive and self-reinforcing.”

Meanwhile, individuals who are comfortable with secularism, and thus secular science, concentrate in the Democratic Party. The process of party sorting along religious lines has helped turn an ideological divide over science into a partisan one.

These days, when political tribalism shapes identity, people are more and more likely to accept scientific findings only when those findings align with their political beliefs. Edsall noted a recent survey that asked, “How much risk do you believe climate change poses to human health, safety or prosperity?” Strong Democrats saw severe risk potential; strong Republicans close to none. As another scholarly paper has put it,

The fundamental principle of science is that evidence — not authority, tradition, rhetorical eloquence or social prestige — should triumph. This commitment makes science a radical force in society: challenging and disrupting sacred myths, cherished beliefs and socially desirable narratives. Consequently, science exists in tension with other institutions, occasionally provoking hostility and censorship.

There is much more in Edsall’s essay, but the central message is clear–and very disturbing.

It is easy enough to make fun of the “anti-science” folks who–as one Facebook meme has it–use smartphones incorporating  scientific discoveries to post anti-science diatribes to a science-based internet. But the consequences of the GOP revolt against evidence and empiricism has spread to rejection of other facts incompatible with religious beliefs, and to growing contempt for medical and other scientific expertise. It powers not just climate denial, but the GOP’s growing antagonism to vaccination and other public health measures.

You’d think “pro-life” people would notice that antagonism to science is often incompatible with life. You’d be wrong.

There’s a reason Scientific American endorsed Harris–only the second time it has endorsed a Presidential candidate.

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Trust

Back in 2009, I published Distrust, American Style: Diversity and the Crisis of Public Confidence. The book was largely written as a rebuttal to Robert Putnam’s argument that America’s diversity was the cause of diminished levels of public trust. That trust levels were (and remain) troublingly low was incontrovertible, but I argued that the culprit wasn’t diversity, but a pervasive loss of faith in a wide variety of American institutions–especially government. I wrote then and believe now that the remedy lies in policy reforms that would make American government (and businesses, nonprofits and religious institutions) worthy of public trust.

Rather than attempting to limit diversity through divisive measures such as building a wall between the United States and Mexico or imposing stricter immigration quotas, I emphasized the need to begin with government reforms: elimination of gerrymandering, electoral wins that reflect the popular vote, and proper functioning of checks and balances. (And this was before the horrifying decisions rendered by a Supreme Court dominated by Trump appointees.)

Research confirms the importance of public trust. Trump’s nasty, gutter-level approach to politics is only possible because we have seen a precipitous erosion of that foundation–the loss of a widespread belief that most people in government and the political class have the public interest at heart and are ethically and intellectually competent.

Because I spent so much time immersed in the literature documenting the importance of trust, I was interested to come across an article from the Guardian about Denmark, and how it became the world’s most trusting country. As the sub-head read, “There are real benefits to a society where people feel safe enough to leave their babies and bikes on the street. How have the Danes achieved this level of faith in their fellow citizens?”

Over the years, Denmark has emerged as the good faith capital of the world. Nearly 74% of Danes believe “most people can be trusted” – more than any other nationality. On wider metrics, such as social trust (trusting a stranger) and civic trust (trusting authority), Denmark also scores highest in the world, with the other Nordic countries close behind.

The article details the various ways Denmark’s trust manifests itself, but the effect is summarized in a statement by one young person:“You have the feeling that people have goodwill. I think it’s a top-down reaction. We have a system that supports, and that creates the baseline for our trust in each other.”

Exactly. It’s the integrity of the system.

America’s White Supremicists attribute Nordic public trust to the relative homogeneity of the population, but research suggests a different source: the welfare state.

 “That was founded very much on mutual trust,” Rosenkilde says. Denmark has a universal model of welfare, which holds that all citizens have the right to certain fundamental benefits and services. In the UK and the US, we have a “residual model”: bare minimum benefits for the poorest and skeleton services for everyone but the richest. “I think the whole idea of people being as equal as possible is very much underpinning this trust,” Rosenkilde continues. “We have this connectedness because you don’t have a lot of people that are very poor or very rich.” Equality, Rosenkilde says, has decreased over the past three decades, as Denmark is caught up in the neoliberal drag of the globe: its Gini coefficient has crept up, but by that measure it’s still the sixth most equal country in the OECD.“

A nation is an imagined community,” Korsgaard says. “What does that mean? It means I’m able to think of myself as part of a community with someone I don’t know. And in order to do that, they have to look more or less like me. They cannot be super-different when it comes to class.” (Emphasis mine.)

Researchers admit that Denmark struggled as immigration made the population more diverse, but they emphasize the importance of class homogeneity–the absence of huge gaps in income–as a major reason the country has been able to cope with other kinds of heterogeneity. As one scholar put it, diversity required renegotiation. “OK, you can be part of this community, even though you’re not white, even though your birth language is not Danish,’ and luckily, I think that is more or less settled.”

As the article concludes, “This really is the most unbelievably equal country, and while trust is a constantly negotiated state, that appears to be a good place to start.”

In November, if we are very lucky, perhaps the U.S. will once again have a functioning government that can address income inequality and begin to restore both the rule of law and public trust.

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