The Wrongologist

What’s
Wrong Today:

A report that most of us missed
during the holidays was “Out
of Control: The Coast-to-Coast
Failures of Outsourcing Public Services to For-Profit Corporations“. It
was written by In the
Public Interest, a resource center on privatization and responsible government
contracting. The report provides a detailed look at examples of poor
outcomes from outsourcing functions that used to be performed by
government workers to the private sector. Here is a bit of the report’s
preamble:

For
decades, Americans have been told that the private sector can do a better
and cheaper
job of providing services than an “inefficient” government. As Michael Hoexter
has written,
a standard belief by the right wing is
that government is always incompetent:

Now it is
true that there are badly run government entities that have done better when
privatized (think British Telecom). But on the state and local level, where
voters have high visibility and usually demand a high level of accountability,
this premise should be considered dubious.

Too
often, outsourcing the management of a government function means taxpayers have
little say over how tax dollars are spent and no say on actions taken by
private companies that control our public services.

• Outsourcing means taxpayers
  cannot vote out executives who make decisions that hurt public health and
  safety

• Outsourcing means taxpayers are
  contractually stuck with a monopoly run by a single corporation – with contracts
  that often last decades

• Outsourcing too often means a
  race to the bottom for the local economy, as wages and benefits fall while
  corporate profits rise

The
report shows that of the 5.4 million people working for federal service
contractors in 2008, an estimated 80%
earned less than the living wage for their city or region.

The report
categorizes the many ways in which contractor behavior is deficient, including:
transparency, accountability, shared prosperity, and competition. For instance,
even though government contracts are almost without exception public,
outsourcing companies always try to extend the veil of secrecy, just as they
have with private companies, particularly with the price of the contract and
the levels of service they are required to provide (SLA’s, or Service Level
Agreements).

But even basic
information about a government contract and the accompanying procurement
process can be difficult to obtain. Corporations may not diligently collect
data and information related to public programs and services, leaving the
public record incomplete. As a result, the public loses access to information
about our own government. Here is an example from the report: (emphasis by the
Wrongologist)

Even though the recordings were of public meetings of
elected city officials and pertained to government business, taxpayers were
denied access to them because they
were considered the property of a private company. Toomey
took the issue to court, where a Sierra County NM district judge ruled against
transparency. Fortunately in 2012, the New Mexico Court of Appeals reversed
that decision, but the message is that we may need to go to court to get basic
information we should have as taxpayers.

The
Wrongologist has written about outsourcing and privatizing government functions a few times in the past year:
here, here,
here,
and
here. He has managed outsourced
federal contracts prior to deciding
on a life of blogging.
In his experience, outsourcing a
contract is almost always a losing proposition for the government,
involving increased costs (despite claims that contracting saves the government
money) and occasionally, poorer service quality.

Outsourcing
can work well, particularly where work ebbs
and flows in response to client requirements. So, using contractors to build the ACA Website was in line with what was
the original justification for use of contractors―the need for a large
workforce with specialized knowledge in a short amount of time.

The
justification now used is that the private sector delivers a better product
more efficiently. The report from In the Public Interest puts that claim to
rest, and you can also see that we are
long past using contractors for temporary needs– placement of foster
children? prisons? government benefits administrators? You could call these
temporary needs if you imagine that we’ll be living in some utopia in a few
years.

The
Wrongologist has written
that the push to outsource or privatize everything from education, to water
rights, to social security, is not about quality, or outcome, or even the greater
good; it is about profit and control of resources.

The public good,
civil liberties, equality, and ultimately justice, declines for those people who
can no longer afford the services. When we hear “The government can’t do
anything right”, that’s a bought and paid for speech spread by those who
benefit from rerouting taxpayer dollars to private corporations.

Privatize the taxpayers’ money. Tear
down the commons. Let taxpayers take the risk, let corporatists take the rewards.

Corporations
are not people, my friend.

And only
the people are capable of patriotism.