A public appeal to stop privatization

Jan 26 2012 - 11:44am

Will the political genius who invented privatization please step forward so those of us who know what a flop it is can haul out our rotten tomatoes and dispose of them accordingly? Thank you!

Privatization is a movement now virtually overtaking cash-strapped city, county and state governments. Supporters claim that privatizing services formerly provided by government -- ranging from prisons to parking meters -- would save the tax-paying public money. We now have ample evidence it does exactly the opposite. So it's time to stop privatizing more government services. It's time to refuse to renew or even to abrogate ridiculously long contracts with private-sector companies to provide those services.

Here's one example of the counterproductive outcomes experienced by governments that have privatized services. This comes from the website Inthepublicinterest.org:

A report from Wisconsin's Legislative Audit Bureau revealed that the state's Department of Transportation "wasted more than $1 million by outsourcing almost half of its engineering work to private contractors" over the past five year. The audit found that state workers could have done about 60 percent of these outsourced jobs at a lower cost, which would have saved the state $1.2 million.

Here's another example: The powers that be in Chicago's city government stupidly signed a 75-year agreement in 2009 with Chicago Parking Meters LLC, giving that firm the right to operate and profit from the city's 36,000 parking meters. Profits are reported to be in the billions of dollars. Chicago's residents and parking patrons are outraged by rates that immediately skyrocketed. City merchants are reporting business has dropped as a result of the new rates. And there are increased reports of meters out of service.

That contract needs to be abrogated, if ever there was one. Yet other cities, such as Washington, D.C., seem to be piling onto the privatization train wreck.

The average citizen might also ask why, if private industry can siphon billions of dollars from the public for a service the government formerly provided, can't the government just increase its rates for the same service? The overage or "profit" could be used to lower the cost of unprofitable services and thereby take some of the burden off taxpayers.

Instead, privatization is allowing private firms to sell services at many times the rates they were provided by government. I have a personal encounter with privatization I'd like to relate. Last year, I broke my neck in a fall from a horse. I was taken by helicopter to a shock-trauma hospital. The state where this occurred had privatized its medical evacuation services two years earlier. A local newspaper reported that, in 2009, when privatization had just taken place, medevac fees skyrocketed to $7,500 to $8,000 per ride. A mere two years later, I was billed almost $19,000 for a 20-minute ride. This is a positively insane, unjustifiable rate increase.

As if all this weren't enough, privatization has apparently increased cronyism and corruption between politicians and businesspeople in many cases. Again, according to Inthepublicinterest.org: "Two judges in Pennsylvania received $2.6 million over seven years from Pennsylvania Child Care LLC, a private company that operated a juvenile-detention center. The judges helped secure the company a 20-year, $58 million contract with the county and aggressively sentenced children for minor infractions to ensure that the detention center remained at capacity."

When one learns about such situations, one must ask what separates our form of government from that of corrupt, Third World dictatorships? At least in the Pennsylvania case, the two judges were charged with racketeering, extortion, bribery, money laundering and fraud, among other crimes. They would not have been prosecuted in a Third World country.

It's possible that some privatization deals save taxpayers money. But considering all the reports of outrageous overcharges, crony contracting, decreases in the quality of services and so on, a more logical conclusion is that privatization has run its course and has got to go.

Bonnie Erbe is a TV host and writes this column for Scripps Howard News Service. Email bonnieerbe@CompuServe.com.

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