Sunday, June 5, 2011

Washington's Dirty Little Secret

Unlike the public sector, the private sector is bred for efficiency. Left to its own devices, it will always find the means to provide services faster, cheaper, and more effectively than will governments.
James Jay Carafano, Private Sector, Public Wars
I suspect the vast majority of Americans would agree with Mr. Carafano. They probably consider the statement self-evident. The facts, however, lead to the opposite conclusion. When not handicapped by regulations designed to subsidize the private sector, the public sector often provides services faster, cheaper and more effectively.
~ from Why You Want the Government Running Health, Education and Defense by David Morris ~
We've heard this refrain for years: The private sector can outdo the public sector, so let's move public services to the former. Republicans harp on this theme incessantly and most Democrats aren't that far behind.

In the superb article cited above, Morris shows how this perspective is based on a lie. What is too often left out of the discussion is Washington's dirty little secret: The private sector predominantly seems more efficient ONLY when they are granted subsidies and tax breaks. When the playing field is level, the private sector tends to be far LESS efficient and far more COSTLY than government-provided services.

The reason why this is so is elementary. The private sector has expenses not born by the government. The two most costly ones are marketing and lobbying. And, while the public often decries government fat cats at the top of the food chain, their pay and perks are mere crumbs compared to the compensation packages lavished on corporate CEOs and top managers.

This whole notion that private firms and corporations can provide basic services to citizens at reduced rates for taxpayers is a crock. The people pushing privatization care nothing about efficiency; they simply want more of our money and they will spin any yarn they can to convince enough Americans to buy into these fairytales!

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