Privatizing Of State Services Has Proven Expensive

Privatizing state functions of government does not lead to less spending. Often just the opposite! It leads to state funds being diverted to legislative campaign donations, as those contractors then buy their biggest customer, by donating to political campaigns.   Politicians try to sell us on the idea of privatizing as being more accountable to the residents.  But too often the contractor is only focused on being accountable to a committee member, in the legislature.   That's not to say that privatizing is bad. It can be good. But the regulating of an industry are often purchased by a contractor, in such a way as to drive out his competitor.   This is also true in your county and municipal govt. It is especially true of your school district.  I've been especially involved in reforming a particular budget process for one state agency.   I've watched as my message has been drowned out by an army of contractors who are only interested in the status quo. They completely resist reforms because they worry that if the agency doesn't continue channeling 75% of the state department's budget through private corporate contractors, they could lose their gravy train.

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  The state agency doesn't actually lobby the legislature. Instead, they pay out contracts to corporations, and those corporations pay for the lobby effort to keep the money coming.

  Republicans have favored privatizing for other reasons. I spoke with former gov. Frank Keating about what led to his decision to close much of the state mental health infrastructure, about 20 years ago.

 " It was mostly an effort to cut the state payroll and eliminate the power of organized labor." 

  Keating believed that organized labor was inflating the cost of operations to a rate higher than the private sector. He reasoned that corporate providers would keep that cost in line through competitive bidding. This is the same mindset that governs road construction and some maintenance. It is true that organized labor heavily favors Democrat politicians. But corporate contractors are 'equal opportunity' benefactors. They will buy any politician they can. And the politician with the biggest campaign war chest usually wins the election. And the incumbent does, as well. An incumbent who is even mildly agreeable to the corporate contractor will be assisted with campaign contributions. Corporate board rooms are looking for whatever factors will promote long term forecasting of conditions favorable to them.

Keating was an FBI agent and federal prosecuting attorney. His mindset  was very "Get tough on crime". He was also a big advocate for privatized prisons. Even out-of-state prisons. A simple nonviolent infraction could send a person far away from his spouse and children. Keating was also assisted in his political ambitions by lobbyists and their private sector money. For any sizable corporation, lobby efforts are a fundamental cost of doing business. 

  But no one can argue with the reality that campaign donations factor in.  In Tulsa, a major retailer just bought a chunk of prime city park property. The former mayor approved the transaction and the city council had no voice on the deal. They immediately created a huge special zone  where any further deals of this nature would require their collective approval. They argued that the building architecture needs to have a specific styling which they could not readily describe to anyone.  The reality is that the mayor could have been influenced by campaign contributions from the retailer.  Most political cynics believe that the council members just wanted to be bought with campaign contributions, as well.

  The message could be summed up in one sentence from Watergate's "Deep Throat".... "Follow the money."

from Sooner Politics.org - Editorial http://www.soonerpolitics.org/editorial/privatizing-of-state-services-has-proven-expensive