Thursday, March 21, 2013

Public money private pockets

Recently the Washington Post published an article on the transit center being built in Silver Spring, MD where I live.  In short, the center is unsafe and unusable even before it opens because of shoddy design and construction.  This is of considerable interest to me for two reasons.  First, I am using public transit daily, and having to walk around a defunct transit center adds considerable inconvenience to my daily commute.  Second, that boondoggle is financed by my tax dollars.

A typical reaction of the gullible American public to this news can be summarized in one line "government failure"  and it is sheer nonsense.  Yet another example of how the American mind is inculcated with business propaganda.  

I do not think it is the local government failure.  It is the utter failure of the "public-private partnership" business model that prevails in this country.  Public money private pockets, which is a recipe for private businesses milking the taxpayer and cutting corners to boost their bottom line.  Bloomberg News had an article on this not long ago showing that comparable public projects cost about twice as much in the US than in EU where the governments have much greater capacity for designing and implementing projects themselves instead of contracting them out .  


The "defense" industry has been using this public- private partnership scheme for decades to milk the taxpayers for military gadgets, and the developers are following the suit.  Another good example is the newly opened Paint Branch High School in Montgomery County (also financed with my tax dollars) - inferior design, shabby construction, and the taxpayers footing the bill for what is labeled as "education spending."  A more appropriate way of labeling it is "corporate welfare state" in which taxpayers subsidize corporate salaries and profits.


This is not a failure of the local government.  This the failure of the economic model in which private business is a sacred cow and the government is a scapegoat for all private business failures.  As long as it so, failures like this will be a part of business landscape, private developers will laugh all the way to the bank, and the taxpayer will keep paying for it through the nose.  It also a proof that the public sector's  capacity to carry out public works itself instead of relying on private contractors will better serve public interests than the crooked public-private partnerships.  Keep this in mind next time you hear pro-business mouthpieces calling for "small government."


2 comments:

  1. We all have examples of this contractual failure between Government and business. Given that in most jurisdictions the drivers for outsourcing are smaller government and government transferring risk - what mechanism can successfully harness the resources of all sectors - not just government and business to deliver public services. In the UK the emergence of public service mutuals and community ownership offers one alternative - might not resonate in the USA though?
    In the meantime- the solution is in your own hands - use a motorbike - cheap to run, avoid traffic etc. - just make sure you live somewhere it never rains or gets cold.

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  2. You are right. Cooperative solutions do not sail very well on this side of the pond, and certainly not for the lack of trying. The efforts to establish a public utility company in Montgomery County do not seem going anywhere.

    PS. Nice hearing from you. I will have a beer for the occasion ;)

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