Everyday Erinyes #153

Experts in autocracies have pointed out that it is, unfortunately, easy to slip into normalizing the tyrant, hence it is important to hang on to outrage. These incidents which seem to call for the efforts of the Greek Furies (Erinyes) to come and deal with them will, I hope, help with that. As a reminder, though no one really knows how many there were supposed to be, the three names we have are Alecto, Megaera, and Tisiphone. These roughly translate as “unceasing,” “grudging,” and “vengeful destruction.”

It’s no secret that I have have been and am thoroughly, uncompromisingly, for years, opposed to privatization of the functions of government.

It just seems so obvious to me that, when you privatize something, you create the need for whatever-it-is to have its own administrative system, but that the government will still have to have some administrative system too. Administration costs money, and, with privatization, you have to spend twice the money to get that service. Employees doing the actual work lose job security, lose benefits, and get paid less for the same work. If it is the same work. Contractors cut corners, so they may not be fully staffed, but the government expects the same work – but won’t get it. Every layer added between employees and the end employer adds to the cost. And, adding insult to injury, if there’s a shutdown, federal employees are at least supposed to get paid retroactively (although God knows what the current regime will do.) Contractors won’t get paid retroactively, so their employees won’t either. Privatization just plain stinks.

I received an email this week from Jeremy Mohler, who writes for ITPI – In The Public Interest. ITPI is a research and policy center focusing on all aspects of the delivery of public goods and services to the public. Naturally, this includes much scrutiny of privatization – who is doing it, how good are the services, what’s the cost. This email basically quoted an article at the ITPI website, and added, “Please help us share this story.” I am only to happy to help. Here’s the email:

Twenty-five years later and the evidence is in: Massachusetts’s Taxpayer Protection Act, known as the “Pacheco Law,” has saved the state’s residents hundreds of millions of dollars.

That’s the conclusion of a new study by Columbia University’s Elliott Sclar and Michael Snidal, along with David Kassel. Their findings confirm what many of us already know in our bones: privatization is more about ideology than it is about saving tax dollars.

In case you missed it, the Pacheco Law is the country’s one and only state policy that puts up a guardrail against corrupt and irrational outsourcing. Before, say, public bus service can be handed over to a corporation, it must be proven that the move will actually save money. The corporation’s bus drivers must also be paid the average private sector or state wage (whichever is lower). And service quality must stay the same or even get better.

These protections were crucial when the Massachusetts Bay Transportation Authority tried to outsource multiple bus lines in 1997. The math showed that privatization would actually cost the state $73 million. Without the Pacheco Law, the deal likely would’ve gone through based on an outside consultant’s inaccurate recommendation.

This flies in the face of the libertarian — and dare I say it, neoliberal — claim that the “free market” is always more efficient and innovative than government. You can almost hear a little Trump in that claim. My way or the highway! I’m the best. The free market is the best. Drain the swamp!

Sure, the government probably shouldn’t manufacture the laptops that its employees use. But basic human needs — water, education, transportation — shouldn’t be left to the violent whims of private markets.

Like any policy, the Pacheco Law isn’t perfect. Sclar, Snidal, and Kassel argue that it’s failed to protect people with developmental disabilities from suffering through the privatization of state-run mental hospitals. In a recent high-profile incident, a man with Down syndrome almost died of pneumonia after staff at his corporate-run group home ignored his symptoms. Tragically, abuse and neglect in privatized group homes is becoming the new normal nationwide.

And it doesn’t take into the account the hidden — and most damaging — cost of privatization: loss of public, democratic control. Charter schools are run by private boards unaccountable to parents. Public-private partnerships often take decision-making power away from the public. Contractors try to hide what they pay workers as “trade secrets.”

But the intention matters. Privatizers say that handing over control of public goods to corporations saves taxpayer money. They say that government should be run like a business. Massachusetts’ Pacheco Law calls them on their bluff. 

Mohler’s email included links to a pdf of the actual report and also to a page at Talking Points Memo where you can read a history of privatization – if you can stand to. I’ve included both, as both are valuable references.

The actual report is 29 pages, though that includes auxiliary pages like contents and notes. The main findings were:

· The Pacheco Law emerged as a guardrail against ideological, imprudent, and corrupt contracting initiatives that commenced under the Weld Administration.
· The Pacheco Law has not been a hinderance [sic] to privatization. It has enabled privatization in 75 percent of the cases in which the Law was invoked and allowed over $60 million in contracting savings.
· The Pacheco Law has not been invoked in all aspects of outsourcing human services. There has been a missed opportunity to strengthen the law to ensure smart cost accounting and quality of service in the outsourcing of all human services.
· A widely publicized study of the Pacheco Law by the Pioneer Institute badly misunderstood the workings of the statute and used a misleading cost analysis to impugn its integrity.
· Had the Pacheco Law not been in effect, and the MBTA privatization of bus routes in 1997 proceeded, the Commonwealth of Massachusetts could have lost well over $200 million as of 2018.

Alecto, Megaera, and Tisiphone, any time that anyone mentions privatization as a viable construct, please help us to remember these talking points, and where to find them, and help us bring them out.

The Furies and I will be back.

Cross posted to Care2 HERE.