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The Most Unforgivable Of Bush’s Legacies: The Privatization Of The Public Sector

by on Thursday, October 11, 2012 at 2:39 pm EDT in Economy, Politics

Perhaps the most harmful of all of George W. Bush’s legacies — and there were many — was the gains he made in transforming our public sector into a private one that enriches itself off taxpayer dollars. After his unparalleled successes on this front, the conservative movement has once again made privatization the central component of its platform.

Just months before invading Iraq, Bush made a bold move to revolutionize the way the United States government runs its core responsibilities. He drafted a new order to begin outsourcing much of its essential functions to the private sector:

On November 19, 2002, the White House Office of Management and Budget placed a notice in the Federal Register proposing that 850,000 federal “Full-Time Equivalents” could just as well be performed by private companies. As the notice points out, those 850,000 amount to half the current federal workforce. The Administration told The Washington Post that it has a goal of reaching the 15 percent mark by September 30, 2003.

All federal agencies must now “justify, in writing, any designation of government personnel performing inherently government activities.” Other positions will then be considered potentially “commercial,” or “a recurring service that could be performed by the private sector.” These major changes took effect on May 29.

This effort ushered in an era of unprecedented profiteering by federal contractors. According to a 2011 POGO study, “approximately one-quarter of all discretionary spending now goes to service contractors,” and contractors now outnumber federal workers nearly 4 to 1:

Since 1999, the size of the federal employee workforce has remained relatively constant at about 2 million, while the contractor workforce has increased radically – from an estimated 4.4 million to 7.6 million in 2005.

Having chosen Halliburton’s CEO Dick Cheney as his Vice President, Bush & Co. set out to redefine what constituted ‘military personnel’. The Bush Administration outsourced a significant portion of U.S. military operations to for-profit corporations. They then bequeathed these war profiteers with two simultaneous wars worth hundreds of billions of dollars in no-bid contracts.

And despite a change in U.S. leadership in 2008, Obama has continued to follow Bush’s lead in privatizing the U.S. military. In fact, at the same time Obama withdrew U.S. troops from Iraq, he began to replace them with military contractors.

A new Time Magazine story reveals that today there are more for-profit contractors in Afghanistan than U.S. troops. The most recent quarterly contractor census report states there were a whopping 137,000 private contractors working for the Pentagon in Iraq, Afghanistan, and 18 other countries in the region. This number doesn’t even include all the thousands of for-profit contractors outsourced by the State Department. To give an example, the State Department is itself paying for approximately half of the 13,500 private contractors now serving in Iraq.

Moshe Schwartz, from the Congressional Research Service, told a congressional hearing last month:

According to DOD data, from FY2008-FY2011, contractors in Iraq and Afghanistan represented 52% of the total force, averaging 190,000 contractors to 175,000 uniformed personnel. Over the last five fiscal years, DOD obligations for contracts performed just in the Iraq and Afghanistan areas of operation ($132 billion) exceeded total contract obligations of any other U.S. federal agency. 

Privatization is sold to the American people under the pretense that for-profit corporations can perform these jobs cheaper and more efficiently than the government. This has panned out to be an absolute falsehood.

The POGO study revealed American taxpayers are paying a steep price for the outsourcing of government jobs to for-profit contractors:

[T]he government pays billions more annually in taxpayer dollars to hire contractors than it would to hire federal employees to perform comparable services. Specifically, POGO’s study shows that the federal government approves service contract billing rates – deemed fair and reasonable – that pay contractors 1.83 times more than the government pays federal employees in total compensation and more than 2 times the total compensation paid in the private sector for comparable services.

Yet, despite taxpayers being billed twice as much per-worker by these contractors, the actual workers themselves often make less in income than federal workers. The study suggested, as you may have guessed, this was due to corporate profits and executive compensation. 

Despite the fallacy in the underlying arguments for privatization, the current economic crisis coupled with huge state and federal deficits have now put privatization in play across the nation.   

One successful tactic conservatives have been using to engineer their privatization agenda is to champion legislation that imposes harsh measures on cherished public institutions, making them obscenely expensive, thereby ensuring their eventual failure.

It is a way of manufacturing a problem that can then be recast as ‘proof’ of government inefficiency — an unfair burden on our ‘overtaxed’ citizenry. In this way conservatives can claim the ‘high ground’ as if they are merely injecting ‘fiscal conservatism’ into the debate on runaway deficits — ones which they themselves manufactured.

Take Bush’s Medicare Modernization Act of 2003. It gave pharmaceutical corporations a free pass to loot Medicare, and with no offsetting tax hikes or spending cuts, thereby ensuring the program would become an instant drain on the national deficit:

The Medicare Modernization Act of 2003 offered prescription drug coverage, but exclusively through private companies. Bizarrely, it prohibited the government from negotiating price discounts from the drug companies. As a result, Medicare Part D drug prices are more than 80 percent higher than the prices negotiated by Medicaid and Veterans Affairs.

One important but obscure component of the Medicare Modernization Act will soon come to haunt us. And that is the creation of an arbitrary 45 percent general revenue cap, which, when reached, will trigger program cutbacks, higher premiums or further privatization. Medicare financing comes from various sources including general revenue, payroll taxes, trust fund interest, and beneficiary premiums. The cap has yet to kick in, but the drug company giveaway was funded mostly through general revenue, so it will come soon. 

And after years of corporate looting of the American taxpayers — enabled by these kinds of bills — the general consensus among our political elites now seems to be that we can no longer afford to maintain this hugely popular government program.

A ‘Grand Bargain’ — supported by Obama — must now be struck that will make painful but ‘necessary’ changes to the program. These ‘pains’ will undoubtedly be imposed on our senior citizens, living on fixed income — never the profiteers. And this forthcoming ‘Grand Bargain’ will only degrade Medicare benefits in a way that will chip away at the program’s popularity, and before long it will become ‘necessary’ and perhaps more politically feasible to completely overhaul it into a voucher program, which will further enrich price-gouging healthcare corporations.

A similar measure was passed to ‘manufacture a default‘ of the U.S. Postal Service. It mandated that USPS — the only self-funding government program — begin pre-funding benefits of future retirees up to 75 years in advance. This is “a burden no other government agency or private company bears.” And low and behold, one of the key architects in manufacturing the USPS crisis, Peter Orszag — from the Neoliberal-Rubinite wing of the Democratic establishment — now insists the USPS should be privatized.

In some ways, this is not dissimilar to the looting and bankrupting of small businesses by the mafia. As portrayed in the movie Goodfellas, members of the Lucchese crime family muscled a foothold into a neighborhood restaurant. The first thing they did was max out the restaurants’ available credit (with no intentions of repaying it) by ordering truck-loads of liquor and goods — not to be sold in the restaurant, but instead carried out the backdoor and sold elsewhere. Once the restaurant had been bled dry of all its credit and goodwill, they proceeded to torch the building and profit further from the owner-on-record’s insurance payout.

Another tactic conservatives have long used is based upon Milton Friedman’s infamous shock doctrine blueprints, as was meticulously documented in Naomi Klein’s The Shock Doctrine: The Rise of Disaster Capitalism. A conservative Louisiana legislature capitalized on the shock and horror generated by hurricane Katrina’s destruction by quickly seizing and then privatizing New Orleans’ public school system when the residents were too shell-shocked to know what was happening:

While many in New Orleans have waited two years for recovery, the restructuring of its schools seemed to happen overnight.

Not long after Hurricane Katrina flooded New Orleans two years ago, the Louisiana legislature cleared the way for the state to assume control of 107 out of 128 schools in the Orleans district. Immediately, the state began converting many of its newly acquired schools to charter schools–publicly funded schools run by for-profit or nonprofit groups that operate by a “charter,” or contract. One result is that the number of unionized teachers dropped from about 4700 to 500.

Corporate investors are literally salivating at the profit-potential in privatizing public school systems. The U.S. currently spends more than $500 Billion in K-12 education, and the “entire education sector, including college and mid-career training, represents nearly 9 percent of U.S. gross domestic product, more than the energy or technology sectors.” More and more private for-profit management companies, across the nation, are being granted full control of public schools to then be funded by public tax dollars.

Privatizing prison systems is another growing industry in the U.S., a country that accounts for only 5% of the world’s population, but incarcerates 25% of the the world’s prisoners. Louisiana — as it did for privatizing public-education — happened to be one of the original pioneers in privatizing prison systems. In the early 1990s, due to recessionary budget constraints, the conservative legislature allowed the very ones entrusted to fill the prisons — the Sheriffs themselves — to become prison owners and to profit from maintaining low prison cell vacancies. Not surprisingly, Louisiana now imprisons more of its residents than any other legal jurisdiction in the entire world. 

Similar efforts to privatize public works have continued across the nation, and across every public sector from toll roads (where toll rates instantly skyrocket after the transfer) to water infrastructure. Florida Governor Rick Scott — aligned with the Tea Party — has been one of the most aggressive in championing this agenda, as he has pushed to privatize the state’s Medicaid program, its public schools and its prisons

It should probably come as little surprise that upon reflecting back on his Presidency in 2010, Bush revealed his biggest policy failure was his inability to privatize social security.

Privatization ultimately leads to a deterioration in the quality of life of a nation’s citizenry. After all, these goods and services had been placed under the custody of the government for very good reasons. Often they were deemed too vital to the overall welfare of the general public (i.e. education, police forces, Social Security, Medicare, Medicaid, military, water, roads, regulatory agencies) to be put into the hands of corporations whose only mission is to maximize profits.

Often it is due to a uniquely inefficient marketplace, such as a marketplace with insufficient competition where price-gouging is all but guaranteed (e.g. unregulated monopolistic utility companies could charge whatever they want).

Other times it is due to inherent conflicts-of-interests, such as when Sheriffs or judges are permitted to own prisons with a profit-incentive to keep them full — i.e. an incentive to arrest a lot of citizens and keep them locked up indefinitely.

What is most alarming about what is happening is that some of it is virtually irreversible.

Sure, the government can always stop outsourcing its core responsibilities to contractors, but when you’ve outsourced your essential government functions, you ultimately outsource your own expertise and talent pool to others, thereby making yourself dependent upon them.

And just try and re-Nationalize public assets — local utility companies, water works, roads, prisons, school systems, the USPS, etc. — after they’ve been sold off to private investors. In Capitalist nations such as the U.S., that gets branded as a ‘government takeover’ or even a ‘Socialist revolution’, and Wall Street, which pulls the levers in Washington, would likely threaten the country with a flight of investment capital.

Or try to achieve what FDR did, but in today’s political climate where moneyed interests own our politicians: try and recreate new Social Security, Medicare or Medicaid programs should the current ones become privatized or dissolved.

Privatization tends to occur when governments find themselves in desperate economic climates. Profit-drooling vultures begin to circle these governments’ highly valuable assets — potential cash cows that are vital to the public interest — and due to political cronyism, they can often be had on the cheap. It is how oligarchs solidify their control over, and their exploitation of, the general public.

The United States now finds itself in one of these moments, and Neoliberals are determined to pick its bones clean.

UPDATE:

From Salon (THURSDAY, OCT 11, 2012) on the privatization of regulatory agencies, in this case the FDA: 

“According to an investigation from Bloomberg Markets magazine released Thursday, the growing privatization of food inspection has led to severe failures in oversight and has caused millions of Americans to fall sick” [and many to die]. […]

After The Iraq Debacle, It Would Be Negligent For Americans Not To Watch Ahmadinejad’s U.N. Speech

by on Thursday, September 27, 2012 at 1:01 pm EDT in Iran, Iraq, Middle East, Politics, WikiLeaks, World

Shaking Hands: Iraqi Pres. Saddam Hussein greets Donald Rumsfeld, special envoy of Pres. Ronald Reagan (Baghdad – Dec. 20, ’83)

One reason why the most powerful interests succeed in pulling the wool over the eyes of the American people is because the masses rarely if ever take the time to read or view the raw information available to them. Instead they rely on others’ interpretations. 

Everyone is guilty of this to different degrees. People’s lives are hectic, there are only so many hours in a given day. So the masses look for quick summaries, 30-minute news programs covering dozens of different news briefs that can be measured in seconds. Fast food news consumption for those on the go.

But in doing so, they become dependent upon these same powerful interests, not only to inform them about what they need to know, but how to think about these issues.

When the interests of both the public and the powerful coincide, then the public can often glean an accurate, though often ‘Cliffs Notes’-level of comprehension on any given issue. But when the public interest conflicts with the interests of the powerful on an issue, then the establishment is well positioned to massage the message and misinform, or to drop its coverage entirely, thereby ensuring the public remains uninformed.

This helps to ensure the masses vote and cheerlead against their own best interests, and in ways that further enrich the powerful. The public ends up supporting wars they later learn were unnecessary, unlawful, costly, and resulted in the loss of hundreds of thousands of innocent lives, often including members of their own families. 

A majority of Americans knew close to nothing about Saddam Hussein after Sept. 11, 2001, at a time when the Bush Administration began its propaganda campaign to mislead the country into a war with Iraq. This made the Neocons’ job very easy. By repeating talking points laced with demagoguery and fear mongering, the Bush Administration convinced a major majority of Americans that this dictator was so evil, so dangerous, so irrational, that his accelerating ‘nuclear weapons program’ made him an ‘imminent threat’ to American security.

One of the most oft-repeated phrases the Neocons used to help demonize Saddam as a monster was “he gassed his own people.”

George W. Bush on Oct. 11, 2001 (one month after 9-11):

“There’s no question that the leader of Iraq is an evil man. After all, he gassed his own people. We know he’s been developing weapons of mass destruction. … And so we’re watching him very carefully. We’re watching him carefully.”

The gassing allegation was true. Saddam DID gas the Kurds on 40-some different occasions. His largest gassing was against the Kurdish town of Halabja in March of 1988, resulting in the deaths of 5,000 people. But what George W. Bush didn’t want you to know, and could rely on the establishment media not to tell you, was that this gassing took place back when Saddam was an ally and aid recipient of the United States, during the Administration of his father, George H.W. Bush.

Samantha Power, in her Pulitzer Prize winning book, “A Problem from Hell: America in the Age of Genocide,” revealed that not only was the Bush Administration well aware of the gassing of the Kurds, they refused to even condemn it. Despite knowing definitively that Saddam was responsible, as declassified documents now reveal, the State Department went as far as to suggest that perhaps Iran was involved on some level in the gassing.

Does this fact make Saddam any less evil? Of course not. But had the public at large realized that Bush and his fellow Neocons were capitalizing on incidents that occurred nearly 15 years earlier — incidents that happened when Saddam was cozy with Bush’s own father and some of these same Neocons, and with their full knowledge — it might have led the public to question why these Neocons suddenly ‘saw the light’ on Saddam’s monstrosity. And that might have taken some of the air out of the ‘imminent threat’ bubble. 

And now Americans are being sold that Iranian President Mahmoud Ahmadinejad is the new Adolph Hitler. This week, the U.S. Senate overwhelmingly (99 votes to 1) passed a new non-binding resolution, proclaiming war to be a viable option should the Iranians gain the capability for a nuke — even if they have no intentions of creating one. The knowledge, in itself, has now been pronounced grounds for war. 

Now, you might not like Ahmadinejad, you might even find his views on any number of subjects repugnant, or his abuse of political dissidents criminal, but he is NO Adolph Hitler, NOR Saddam Hussein.

The Washington establishment is terrified that you too might draw this same conclusion. Because if Israel were to launch an attack on Iran, the U.S. would undoubtedly be dragged into war. And none of our politicians have the guts to ward Israel off by threatening repercussions (e.g. aid cuts, no more U.S.-vetoes to shield Israel from accountability at the U.N. Security Council, etc.). And no one in the mainstream media has the courage to address this unprecedented ‘tail wags dog’ dynamic.

So instead, they ALL demagogue the Iranian President, embellish his words, make comparisons to Hitler, as if to make his ‘irrationality’ and ‘evilness’ a type of conventional wisdom that must remain unchallenged, especially during prime time.

When President Ahmadinejad gave a speech at the U.N. yesterday, the U.S. delegation boycotted it, thereby sending a loud and clear message to the nation that this leader is so despicable, so evil, so threatening, that they wouldn’t dare attend.

Despite President Obama’s apparent reluctance for war, the American war drums continue to bang loudly. Each week, the threat of an Israeli attack gets heightened and PM Netanyahu continues to meddle in the U.S. Presidential Elections, blatantly trying to entrap the U.S. President into committing to war.

All Americans owe it to themselves to watch Ahmadinejad’s U.N. speech. Watch it and decide for yourselves whether the Iranian President is the depraved lunatic you’ve been told; whether his words make him such an ‘imminent threat’ to the United States, that hundreds of thousands more innocent lives are worth losing, trillions more dollars are worth spending (err borrowing); that it is worth having our gas prices tripled, and our economy ransacked.

Spare yourselves the establishment’s caricature of Ahmadinejad and just watch him for yourself:

YouTube Preview Image

TRANSCRIPT (at mid-page)

Clinton To Iran: We Have No Proof You Are Pursuing WMDs, So Prove You Are Not Intending To

by on Sunday, April 1, 2012 at 3:11 pm EDT in Iran, Middle East, World

Despite all intelligence agencies (in the U.S. and in Israel) reconfirming the assessment that “Iran hasn’t yet decided to pursue a nuclear weapon and has not reconstituted a clandestine nuclear weapons program,” which the 2007 National Intelligence Estimate (NIE) expressed, with “high confidence,” had been abandoned in 2003, the world is nonetheless punishing (boycotting) Iran, as if it is doing just that.

Now Secretary of State Hillary Clinton is stating that Iran bares the burden of proving its “Intentions” to her:

US Secretary of State Hillary Rodham Clinton on Sunday urged Iran to back up its declaration that Islam bars weapons of mass destruction by agreeing to a plan that would prove it does not intend to develop nuclear arms.

To demonstrate just how ludicrous this line of thinking is, imagine if a police officer knocked on your door, and informed you that all their evidence suggested you were an honest and law-abiding citizen, but that he would arrest you anyways, unless you could provide proof to him that you had no “intentions” of committing a crime. 

More and more, this ‘Iranian threat’ crusade is beginning to resemble a staged controversy of the very worst kind. 

Iraqi PM Nouri al-Maliki To President Obama: GET OUT!

by on Wednesday, December 29, 2010 at 12:19 pm EDT in Afghanistan, Iraq, Politics, World

Progressives and Libertarians alike have felt largely ignored by the Obama administration regarding their calls for immediate troop withdrawals.  It now appears there is some hope on the horizon.  Iraqi Prime Minister Nouri al-Maliki just stated to the Wall Street Journal that he wants U.S. troops out by the end of 2011.  Period.  No ifs, […]

Obama’s Nobel Peace Prize Speech Incites Neo-Con Cartwheels

by on Sunday, December 13, 2009 at 9:38 am EDT in Afghanistan, Africa, Americas, Asia, Europe, Iraq, Middle East, Politics, World

President Barack Obama’s Nobel Peace Prize Speech, in my opinion, was an attempt to somehow mesh Candidate Obama — the principled, compassionate, mindful leader who won the Nobel Peace Prize — to President Obama — torch bearer of the neo-con commitment to open-ended warring. He started off on a semi-defensive tone, giving something of a […]

War Mongers Are Furious About Proposed War Surtax On Wealthiest 2%

by on Tuesday, November 24, 2009 at 4:35 pm EDT in Afghanistan, Politics, World

Those on the right — the same ones who claimed to be ‘fiscal conservatives’ while they doubled our national debt with trillions in tax cuts for the wealthy, while simultaneously fighting two wars — are now up in arms that the richest two percent may be asked to pay a war surtax to help fund […]

The Truth About Democracy: It’s Only as Reliable as Our News Programming

by on Sunday, October 4, 2009 at 11:54 am EDT in Iraq, Politics, World

Whenever the people are well-informed, they can be trusted with their own government. –Thomas Jefferson The first decade of this new century will be remembered by many as a time when a significant segment of our society became incapable of differentiating news from propaganda. This phenomenon has endangered the very fabric of our democracy. The […]