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Monday, December 11, 2006

Paul Krugman: Outsourcer in Chief

Paul Krugman looks at the problems arising from the privatization of government services under the Bush administration:

Outsourcer in Chief, by Paul Krugman, Commentary, NY Times: According to U.S. News & World Report, President Bush has told aides that he won’t respond in detail to the Iraq Study Group’s report because he doesn’t want to “outsource” the role of commander in chief.

That’s pretty ironic. You see, outsourcing of the government’s responsibilities — not to panels of supposed wise men, but to private companies with the right connections — has been one of the hallmarks of his administration. And privatization through outsourcing is one reason the administration has failed on so many fronts.

For example, ... Saturday’s New York Times describes how the Coast Guard has run a $17 billion modernization program: “Instead of managing the project itself, the Coast Guard hired Lockheed Martin and Northrop Grumman ... to plan, supervise and deliver the new vessels...” The result? Expensive ships that aren’t seaworthy. ...

In Afghanistan, the job of training a new police force was outsourced to DynCorp International ... under very loose supervision: ... auditors couldn’t even find a copy of DynCorp’s contract... And $1.1 billion later, Afghanistan still doesn’t have an effective police training program.

In July 2004, Government Executive magazine published an article titled “Outsourcing Iraq,” documenting how the U.S. occupation authorities had transferred responsibility for reconstruction to private contractors, with hardly any oversight. ... We all know how that turned out.

On the home front, the Bush administration outsourced many responsibilities of the Federal Emergency Management Agency. For example, the job of evacuating people from disaster areas was given to a trucking logistics firm, Landstar Express America. When Hurricane Katrina struck, Landstar didn’t even know where to get buses. ...

It’s now clear that there’s a fundamental error in the antigovernment ideology embraced by today’s conservative movement. Conservatives look at the virtues of market competition and leap to the conclusion that private ownership, in itself, is some kind of magic elixir. But there’s no reason to assume that a private company hired to perform a public service will do better than people employed directly by the government.

In fact, the private company will almost surely do a worse job if its political connections insulate it from accountability — which has, of course, consistently been the case under Mr. Bush. ...

Underlying this lack of accountability are the real motives for turning government functions over to private companies, which have little to do with efficiency. To say the obvious: when you see a story about failed outsourcing, you can be sure that the company in question is ... run by people with strong G.O.P. connections...

The failure of privatization under the Bush administration offers a target-rich environment to newly empowered Congressional Democrats — and I say, let the subpoenas fly. Bear in mind that we’re not talking just about wasted money: contracting failures in Iraq helped us lose one war, similar failures in Afghanistan may help us lose another, and FEMA’s failures helped us lose a great American city.

And maybe, just maybe, the abject failure of this administration’s efforts to outsource essential functions to the private sector will diminish the antigovernment prejudice created by decades of right-wing propaganda.

That’s important, because the presumption that the private sector can do no wrong and the government can do nothing right prevents us from coming to grips with some of America’s biggest problems — in particular, our wildly dysfunctional health care system. More on that in future columns.

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Previous (12/8) column: Paul Krugman: They Told You So
Next (12/22) column: Paul Krugman: Democrats and the Deficit

    Posted by on Monday, December 11, 2006 at 12:15 AM in Economics, Market Failure, Policy, Politics | Permalink  TrackBack (0)  Comments (46)

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