On Privatization

I’d taped an episode of Coffee with Konnie last Thursday morning (which was an experience, and which deserves a separate post), and she sprung a question on me which I wasn’t prepared for.  The question was what I felt about privatizing Hope Cemetery.  So I was not completely surprised to see this order on today’s City Council agenda:

10d. Request City Manager report on what savings, if any, can be realized from the sale/transfer or privatization of city owned garages and parking lots, Hope Cemetery and the DCU/Convention Center. (Lukes)  

I feel strongly about privatization, or, rather, against privatization, but I don’t think I was able to express why and how I feel on camera (we’ll see, I suppose, but I think I had a look of horror on my face, followed by some sputtering).  There’s a reason I have a blog and not a vlog; I really do need time to think about what I want to say, and I don’t do terribly well on the fly.  Also, I talk with my hands and have big hair.

Why privatize?

The move toward “privatization” in many areas is a tacit admission that in some (though certainly not all) areas, governments in the past have bitten off more than they can chew — either the government solution became too cumbersome, too expensive, or the well-intentioned champions of old failed to see where their efforts would lead 50 years later.

It’s ok to admit this failure, and admit that perhaps someone else or some other entity might be better at doing a certain worthwhile thing.  (Konnie mentioned the example of City Hospital, which is an example of a formerly city-owned entity that has morphed into something else.)  Or even that it might be a worthwhile thing better left to individuals.  In some instances, despite hassles & expense, government is in a better position to do certain things, and “society” may be worse off if we hand these functions to someone else.

Why the thought of Worcester privatizing certain services scares me

Worcester is notoriously bad at making sensible choices about its future, so these decisions (to privatize or not) are full of opportunities for well-intentioned city councilors, local demagogues, opportunists & random dunderheads to grasp failure out of the jaws of success.  Government and its hangers-on are often as short-sighted and clumsy in their “privatization” efforts as they were years ago when government took on all sorts of roles willy-nilly without regard to whether it really ought to have.

We ought to ask ourselves first and foremost — regardless of whether government ought to have taken on X (because in many cases it probably oughtn’t have done) — is there an overall benefit now to shift that responsibility to some other entity for the foreseeable future?  That overall benefit needs to take a lot more things into account now, including all of the liabilities that government heedlessly created for itself as it assumed more and more responsibilities.  (And, of course, whether those liabilities will be mitigated by any privatization efforts, but more on that in a few paragraphs.)

The decisions are going to require better brains than Worcester possesses.  (I have absolutely no confidence that Worcester will ever be capable of an intelligent governmental decision.  I don’t mean that to be offensive; I think Worcester does many activities that require no vision quite well.  I have just not agreed with any major project the city has had a hand in that has occurred in the past fifty years.)

What concerns me is the wholesale assumption that corporations do things more efficiently than government.  Corporations are in the business of making money — ostensibly to make money for shareholders, though I think the excesses that occurred after certain bank bailouts made it clear that even the shareholders must defer to the desires of upper executives.  I’ll say that again: corporations are in the business of making money.  And they can make money one of two ways, when it comes to performing functions that the government previously did: by paying people less, or by just plain doing less.

It’s the former that I worry about the most.  Konnie also asked me what I would feel about library privatization, and I outlined what I said here: that Worcester already pays nearly nothing compared to every other community, and that I’m not sure what savings we’d gain from privatization.

But what about the pension liability? she asked.

I admitted that I haven’t a clue about pension liabilities, and I’m sure it’s something to worry about.  But I know what privatization would bring: we’d fire all the librarians, a private library corporation would hire them back at much less than what they’re worth, and the employees would pay into Social Security rather than a pension.  Those who’d paid 20+ years into their pension would be officially screwed: upon retirement, they wouldn’t get a full pension, and they would have their Social Security reduced by their pension.  Privatization would do nothing about those employees who are currently receiving pensions.

And — of course– we’re subsidizing Social Security as well.  All that would happen would be to shift the “we”-as-taxpayers-of-Worcester to the “we”-as-federal-taxpayers.  We’d force people to take a significant pay cut and we ultimately wouldn’t “save” anything, but we’d just shift our taxes, or our subsidies, from one area to another.

Two Visions for our Posterity

I asked Konnie where privatization would end — privatizing parks?  And she really delighted in that idea.  I said that I felt that we were taking everything good about government and were willing to sell our children’s future for short-term gains.

Oh, the children, she said.  When people talk about the children, they’re really talking about raises for themselves.

(As an aside, when I mention children, I’m actually thinking about children — my own and the others of their generation, and the generations that will follow.  And perhaps Konnie’s also worried about them in a different way — that she doesn’t want them saddled with the cost and bureaucracy of the bad decisions of the past.  I’m worried that they won’t have anything — parks, libraries, good schools — with which they can continue the democratic experiment of which I’m so fond.)

Like the teachers, I said, who agreed to less salary in exchange for paying less of a percentage of their benefit premiums, and who are now being portrayed as being greedy?

You see, there are people in the media who will claim that there’s a “boat-load” of teachers making over $100,000.  That twenty or thirty or forty years ago, public school teachers were holy unmercenaries who would have taught for crumbs of bread and a glass of water once a week, but now the teachers are money-grubbers who dare ask for a wage commensurate with holding a master’s degree and for the city to not rewrite history when it comes to previous collective bargaining agreements.

Good teachers are worth paying a premium for, whether in salaries, benefits, or both.  I think most people would agree that too much of our tax dollar is spent, not on salaries for outstanding teachers and for quality school buildings, but on things like administration, unfunded state & federal mandates, and the salaries of lackluster/deadweight teachers  who are protected from firing by union contracts.  Government usually doesn’t have the intestinal fortitude to tackle the excesses & trim the dead weight, because it’s beholden to special interests for votes & campaign dollars, or to state/federal government for various bits of largesse.  Some feel that because of this governmental cowardice, privatization is the only way to clear the deck, which unfortunately tosses the baby (the high quality teachers) out with the bathwater.  The best solution would be a government with guts & common sense, but unless Tracy Novick can be cloned, that ain’t happening.

So, yes, I understand the concern that we will be passing on debt to our children, grandchildren, and beyond.  But any concern about that must also be tempered with an overall vision of the positive aspects of our legacy — we must remain concerned with giving our children/grandchildren a quality education, with giving them access to books and other media, with giving them access to excellent recreational and cultural opportunities, just as much as we must worry about the cost (current and future) of those things and not saddling those children/grandchildren with ever-increasing debt.

We can either look at all of these things — parks, cemeteries, schools, libraries — as burdens that our society should offload onto the most willing taker, or we can look at them as part of what makes our society civilized.  It’s entirely fair to examine how we’re funding these things — and I’m sure that each of my readers can present a list of areas where they feel things can be improved.  And it may sometimes prove difficult to make any of those improvements through the City Council or the City Manager.  But if key services/amenities are privatized, what further recourse will you have for grievances with a private entity/corporation?  Voting with your feet/dollars?  That might work at the shopping mall, but not at the local library or park.  Let’s not just look at the dollar figure in the budget that could be “saved”, but what will be lost — be it in the areas of quality, universal access, local control, etc.

That moment when Konnie asked me about privatization is emblematic of how we as a community can get polarized over these issues — one camp wanting to preserve resources/amenities for themselves and future generations, and the other camp wanting to keep costs down for themselves, their children and future generations.  As in most things, both sides have important priorities that don’t need to be mutually exclusive.  When the topic of privatization comes up tonight, I hope that cooler heads may prevail and that we as a community may prefer to search for creative/constructive ways to address budget issues instead of chasing quick fixes.

(note: I don’t have exact quotes from either Konnie or me, so I’ve related the rough outline of our conversation in italics.  Any misrepresentations of that conversation are, of course, mine.)

One thought on “On Privatization

  1. Tracy says:

    You might be interested in a similar thought from Diane Ravitch around public education here: http://blogs.edweek.org/edweek/Bridging-Differences/2010/10/dear_deborah_i_reviewed_waitin.html

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