Nel's New Day

April 27, 2011

Privatization/Deregulation

Filed under: Uncategorized — trp2011 @ 3:11 PM

I live in a small (by some people’s definition) town with only one newspaper that is published twice weekly. When I moved here a couple of decades ago, it came out only once, but that changed when a large retail chain insisted on putting out its advertising on Friday. Also when I moved here, the newspaper was a respected part of the community with a professional editor who trained the new people in journalistic style and content. After her departure, the newspaper was purchased by a company owned by a wealthy, conservative man.

The newspaper is now composed primarily of press releases with little real news. There is no longer even an editorial on the “Opinion” page, but the owner does write a regular column for all the newspapers that he owns. He starts the column by describing all the exotic South Sea islands that he visits before he launches into virulent anti-progressive rants. The most recent one, “reducing government costs,” touts the virtues of privatization and deregulation in saving money.

Some quotes from the column: “Cost control and management of resources is tighter and more efficient in a for-profit company.” “Private companies pay far less in wages, benefits, and pensions.” “Goods and services are produced more economically by free enterprise.” “Deregulating oil company caused oil prices to plunge.”

An example of  money-saving privatization was made clear when the government used private companies to manage government grants after Hurricane Katrina. Hired to do this, Witt Associates subcontracted the job to Indiana-based PinPoint Resources which then hired workers for an hourly wage of $19 to $20. PinPoint subsequently billed Witt Associates $37.50—an hour. Witt turned around and billed the government $75 an hour for processing the paperwork. Public workers in the public field may consider themselves fortunately to be getting what these private workers did, but they certain don’t get $75 an hour.

Another investigation showed that a private engineering firm billed the government for, among other things, theater tickets and a flight to Las Vegas when it was hired to oversee the reconstruction of New Orleans buildings and infrastructure. That company doesn’t get credit for tighter and more efficient cost control and management of resources.

Halliburton has consistently overbilled the Pentagon by millions, and Enron CEOs have gone to jail for defrauding stockholders. Medicare patients who have taken the HMO option cost the country far more than those with the public option. A study in Texas has shown that 98 percent of their public schools met state standards as compared to only 66 percent of the charter (read “privatization”) schools did. It spears that these free enterprise examples are not producing goods and services more economically.

Excessive costs are not only monetary. The government has discovered that with the use of Blackwater and other private military forces inIraq. There is no way to control these forces because they are not subject to the Uniform Code of Military Justice and cannot be prosecuted under civil law. When they leave their posts, which they have, they cannot be considered AWOL. Even worse were the abuses in Bosnia where these private military contractors participated in purchasing young girls, some not even teenagers, and sold them into sexual slavery.

Recently Paul Ryan has been described as “courageous” because of his solutions for the removing the deficit. His statements about saving money through privatizing Medicare are lies. The nonpartisan Congressional Budget Office has stated that in the first year of Ryan’s plan, the costs will be far higher using private insurance than the existing Medicare program. Specifically, Medicare can provide health care for 11 percent less than the expenses required by private insurers. For the increased amount of money required through privatization of Medicare, beneficiaries would get less care.

Insurance companies also show the benefits—to insurance companies—of deregulation. With no oversight the costs would be highly astronomically, instead of just standard astronomical. For example, last year California Anthem Blue Cross tried to raise its rates 39 percent—in one year–before the company was reigned in.

The newspaper column listed oil deregulation specifically as a cost-saving program for U.S. taxpayers. In the past decade the top five multi-national oil companies “earned” almost $1 trillion in profit—at the same time that they plan to collect $36.5 billion over the next decade because Paul Ryan and the rest of the conservatives won’t touch the oil companies. During the next 25 years they will also reap $53 billion by not paying royalties on someGulf of Mexico production. Gas prices have increased 20 percent within the last four months. That’s what oil deregulation has given the U.S. taxpayers.

I’m guessing that privatization and deregulation believers would claim that these are just isolated examples. I think they are just the tip of the iceberg.

Note: House Speaker John Boehner slipped and said that he might consider removing the agreement to pay subsidies to the oil companies. When President Obama quickly agreed, Boehner made back-pedaling noises.

Update of the “Birthers”: Donald Trump is euphoric after he single-handedly forced President Barack Obama to release the long version of his birth certificate. “Today, I’m very proud of myself because I’ve accomplished something that nobody else has been able to accomplish,” Trump said. “I am really honored, frankly, to have played such a big role in hopefully getting rid of this issue.” The President sent a person to Hawaii to get a copy, another unnecessary expense forced on the country by conservatives. And I’m guessing that the “birther” discussion is not over.

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