Sunday, July 29, 2018

Privatization is the Holy Grail of Corporate Greed  

Free Market is predatory capitalism

The great con of capitalism is the ability of corporations to fleece the federal coffers and taxpayers for their own private gain. Through a well-orchestrated campaign, they managed to convince taxpayers that “government is too big” and “federal workers are too lazy and too well compensated.”  It is the con of a lifetime, for somehow taxpayers seem to forget that whether the government paves the road or a private entity does so, in the end, we still have to pay the tab. 

There’s a common belief that private companies can help governments save or make money by doing jobs faster and cheaper, or managing public assets more efficiently. In some instances, state and local governments have identified savings by hiring outside contractors to handle tasks like trash collection, pothole repair, and water treatment. But on a larger, national scale, privatization is nothing more than a scam.

In fact, the privatization of public services can drive governments deeper into debt because the contractor has an incentive to spend the least amount for quality to maximize profits. It is nothing more than a way to skirt federal regulations, to legally discriminate and to rob the revenue coffers. The scam is promoted for everything from prisons to schools to sports stadiums. 

The Internet Superhighway

An article by the analyst, Bruce Kushnick explained how deregulation of the telephone company has cost taxpayers $360 billion in rate increases, subsidies, tax breaks and overcharges. 

When Al Gore called for nationwide broadband two decades ago, the task was given to private telephone concerns who instead directed the money to build second-rate wireless businesses, overpaying their executives and rewarding stockholders.

The original Stimulus (2009)called for $2 billion in broadband investment that was stripped from the plan for tax cuts.  As a result, the U.S. is a second tier communications nation, ranking 15th in broadband behind countries like Hong Kong and South Korea. 

In the meantime, cyber attacks and cyber espionage have become the top security threat facing the United States. Digital assaults on government and computer networks are the new terrorism.  


The Stockholm International Peace Research Institute (SIPRI) estimates that in 2010, the U.S. spent $235 billion on arms. Why?  According to soldiers, the Afghanistan weapons inventory contains hundreds of unopened weapons crates.  And what happens to all this surplus weaponry? 

Title XVI of the National Defense Authorization Act for Fiscal Year 1996 (Page 331) created the Corporation for the Promotion of Rifle Practice; Firearms Safety (CPRPFS). 
“The Corporation may obtain surplus property and supplies without cost, but may sell at fair market value surplus rifles, citizens of the United States over 18 years of age who are members of a gun club affiliated with the Corporation.”
The NRA is such a corporation. Why is Congress so unwilling to regulate guns? Maybe it's because the only business more profitable than selling drugs is weapons sales.

Prison Industrial Complex

There is no better example of the private prison scam than Arizona. The state is losing an average of $3.5 million per year, according to an AFSC analysis. What’s more, Arizona officials knew private prisons would not save money, but prison economics is what drove Arizona’s immigration concerns.

For-profit prison firms skimp on labor costs, typically paying guards $7 to $10 per hour with no benefits and little training. The savings don’t benefit taxpayers,  they line the pockets of corporate executives and shareholders. Reports show that it actually costs more to run a private prison than a state run facility. The most egregious outcome is the incarceration of people, for little or no reason, in order to keep the beds filled.

Two Pennsylvania judges have been charged with taking millions of dollars in kickbacks from a builder to send teenagers to two privately run youth detention centers.

Military Industrial Complex

There exists no better example of the privatization scam than the military-industrial complex.

A Commission on Wartime Contracting in Iraq and Afghanistan which was created by Senators Claire McCaskill (D-Mo) and Sen. Jim Webb (D-Va.) in 2007, concluded that up to $60 billion in U.S. taxpayer money has been squandered in contract waste and fraud. The committee report cited "ill-conceived" projects, "poor planning and oversight", "poor performance" by contractors, as well as "criminal behavior and blatant corruption." 

Many complain that federal workers are overpaid, while taxpayers were billed $5 million for 144 mechanics who worked as little as 43 minutes a month. The private concerns aren’t even required to supply their own equipment and materials. One contractor, KBR (Cheney’s Halliburton) can't account for $100 million worth of government-furnished property in Iraq. 

The same company collected $204 million for electrical work that was so shoddy as many as 12 soldiers were electrocuted to death, including a Special Forces commando who died after he was shocked in a shower stall.

Mother Jones did an excellent expose' on what they called military contracting "boondoggles".

Remember the Sequester

When Congress passed a continuing resolution that sought to mitigate cuts made to the defense department, but left cuts to programs like head start, unemployment and food stamps in place, I thought of Dwight D. Eisenhower who in 1953 said:
“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.”
The sequester cut a total of $85 billion. Was it necessary to end Head Start for thousands of children, furlough any workers? And just think, contracting is merely one phase of military outsourcing. The real cost to taxpayers has been in privatizing and grossly overpaying for tasks military members can do themselves.

President Obama wanted to retire three Navy cruisers and Secretary of Defense Panetta went before Congress and asked that obsolete weapons and programs be discontinued...not only did Congress ignore both requests, but the Defense Department was awarded even more money than requested.  Congress did, however, make plans to reduce military personnel, raise their share of TriCare, reduce their housing allowance and cut veterans benefits. Fortunately, President Obama vetoed the bill.  But it just goes to show,  If the axe must fall, it falls on taxpaying Americans.

Most people recognized the privatized profit scam of the Troubled Asset Relief Program (TARP) bank bailout. The same loopholes, subsidies and tax cuts grease the gears of all privatization. We pick up the tab for sports arenas and player’s multi-million dollar contracts. Even as Congress raised taxes on the middle class, they gave a $500 million tax break to a pharmaceutical company and passed out favors to NASCAR, Hollywood and fracking companies.  

There are now charter school chains and Cyber charter schools where the heads are paying themselves $400,000 and $500,000 a year. They are not collaborators in education but business competitors.
The cost of Medicare soared when privatized insurance (Part D) was added.  We give tax breaks, loopholes and subsidies to oil and gas and they still jack us up at the pump. They get us coming and going, rob us of revenue that supports our needs and they do it without creating jobs. Privatization is not a panacea, it is the holy grail of corporate greed. 

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