Ask any American whether private businesses are run more efficiently than government projects and you will probably get a resounding, “Hell yes!”
I imagine that’s the mythology behind the Republicans’ current drive for “privatization.”
Republican candidates want to put government-run programs like Social Security, Medicare and the VA in private hands. And it seems a lot of voters are listening.
But I would argue that many government-run programs are operated at least as efficiently as comparable privately owned projects. And the government-run programs are usually much more transparent.
I have worked for governments and I have worked for large corporations. And my experience is that they both tend to be unwieldy, wasteful and quite often absurd. The bigger an operation gets the more inefficient it tends to be. And, yes, I did learn about “economies of scale” at school. But there’s a downside as well as an upside to expansion: exceed critical mass and the view is all downhill from there.
I got to thinking about privatization this morning when I saw the headline in the local newspaper:
Polk Works Agency May Have to Pay $458,480
The article reported that the local branch of a privately run agency set up by the state of Florida to replace the Department of Labor had mishandled the bid-processing procedure.
Here’s an excerpt from the article:
In April, the Florida Agency for Workforce Innovation ordered Polk Works to pay back nearly $150,000 in public funds spent on renovations to its Lakeland and Winter Haven One-Stop Centers that began in 2007.
The initial repayment order stemmed from an independent audit of Polk Works’ 2008-09 fiscal year, which determined the agency failed to correctly seek bids for the facility upgrades and repairs, in addition to not having the work preapproved by the AWI.
A recent review of Polk Works’ 2007-08 fiscal year by the state’s Inspector General now says the agency should have to repay an extra $310,421 for a possible grand total of $458,480.
I was the paper’s finance writer when the state demolished its Department of Labor, dumping dozens of civil servants, and tapped a bunch of good ol’ boys (and gals) to run the unemployment offices across Florida. It was the birth of a private – and massive – bureaucracy named the Agency for Workforce Innovation.
Unlike the pernicious conversion of hospitals into for-profit businesses, this was a “not-for-profit” operation. But there was money to be made – in board members’ “expenses,” for example. And there are always opportunities to channel lucrative deals to good ol’ buddies in operations like this.
Consider these paragraphs from the article:
The Inspector General’s report says Polk Works spent a total $459,004 on building renovations and furniture with Renditions, a Winter Haven-based firm owned by Polk Works board member Dick Till, and managed by his daughter, Susan Waddell.
Polk Works officials previously said they chose firms from a phone book to solicit price quotes for the renovations, but the AWI says Polk Works should have advertised the work for public bidding for purchases exceeding $25,000. Polk Works also never sought correct prior government approval for the renovations, according to the AWI.
The Inspector General’s report says Susan Waddell disclosed her relationship to Dick Till during an initial consultation with Polk Works, but ultimately “Ms. Campbell-Domineck (Polk Works’ president and chief executive) said the issue was never raised with the full board. When asked if Mr. Till had ever filled out any conflict of interest form, she said, ‘No, he did not.’
Could this kind of thing have happened when the unemployment offices were run by civil servants? Probably. People are people wherever they get their paychecks.
But it is my experience that the confusion and secrecy resulting from “privatization” affords more cover for hanky-panky and incompetence, not less.