Tuesday, December 29, 2015

A Case Study in Privatization

Here is a story that Atrios has been covering for some time, which is a perfect parable of what privatization of government services is all about.

So, the Philadelphia school system was having trouble finding substitute teachers.  In fact, for the last year that they were doing this on their own, they were only able to fill 64% of their need.  Well naturally, we all know by now that government can do nothing but screw up, and that private enterprise and the free market are the answer to all of our problems.  So, the school system contracted with a private company, which they agreed to pay a couple of million dollars to take over the task.  The company promised that they would supply 75% of the need on their first day of operation, and quickly raise that number to 90%.

The actual numbers?  17% at the start, which they have now managed to raise to a sky-high 37%.  This, in return for those couple of million dollars to do a job that the school system was already doing far better.

But, of course, that is not the whole story.  If this private company was treating the substitutes the same as the school system does, there would be no reason why they could not have maintained the inadequate 67% figure, and presumably raised the number somewhat, through their recruiting expertise, which is what the school system was supposedly paying for.

However, that is not what they did.  They slashed the pay of substitute teachers, and eliminated unions, thus denying teachers not just money, but benefits and job security too,  Well, someone had to cough up the dough for the millions paid to the company's executives.

Let me digress.  My grandfather was a Chicago gangster back in the day.  He ran a lot of gambling operations.  Here is what he told us:  The house only pays out three quarters of what it takes in.  Consequently, his observation was that no one could win at gambling in the long run.  He always said that if he had to do it over again, he would have been a veterinarian, because the vet is the only person he ever saw walk away from the track with money in his pocket.

What does this have to do with anything?  How can anyone be so idiotic as to think that you can adopt a system where a large part of the money is skimmed off the top, and expect better results?  Yet that is exactly the preposterous basis for all calls for privatization, justified by the malicious falsehood that all government workers are mindless, lazy bureaucrats, while all corporate CEO's are altruists just looking for a way to make things better for everyone.  The whole thing is demented.  Of course, it is no more demented than supply side economics, austerity, or any other cant from the right, which has only one real purpose, and that is to justify taking money away from average people to give to the rich.  And since that is the only purpose of privatization, I guess we might as well admit that this example of it worked very well indeed.


Mister Sterling said...

Reagan and Thatcher built quite a legacy of convincing their people that Private was better than Public. It's one of the greatest hoaxes ever pulled off in postwar western civilization. FDR would have strangled them both.

Magpie said...

Oh but teacher's unions are just about protecting child molesters - that's what Right wing bloggers and pundits tell me.

An example of the lack of commitment from these good-for-nothing, Bill Ayres-indoctrinated, librul values-infested 'teachers':

“While many educators declined attribution in fear of retaliation from the district (sounds like The fucking Hunger Games), a few have been willing to speak out...

Nearly every day, the permanent teachers have to use prep periods to stand in for vacancies. "That means that we're basically all covering all the time," said Combs.

Seeing the logistical nightmare that's thrust on her colleagues, Combs has wrestled with herself for months about taking any time away from work.

"I'm having such intense guilt about ever being out of school," she said. "I have this doctor's appointment that I've been supposed to be having for months that I've been putting off and putting off and putting off. When Combs finally decided to make the appointment, she felt horrible. "I feel like I'm completely letting my kids down." “

Anonymous said...

There has been a cry from the right for a long time that all government needs is to be run more like a business. I guess Trump is their answer. That has always been a fallacy, but now that we can see the negative effects of privatized government services (prisons, schools, etc., etc..) one would think that's enough evidence to stop, but not for Republicans. Cutting taxes to increase productivity (and thus increased tax collections) has also been proven wrong, except to the Republicans. We have learned these lessons before (1920's) but have apparently forgotten.