Public pays for privatization

It’s a frightening to think that "...the real trend in infrastructure today is not building more of it but privatizing what exists.” In a great Politico piece today, Matt Stoller, a fellow at the Roosevelt Institute, sums up how it appears that everyone but the actual public benefits from privatization:

Political actors get to close deficits without raising taxes on wealthy interests. And the political muscle is provided by the people who ultimately benefit from the deal — the same way that Countrywide, Fannie Mae and allied private bankers brutalized their political critics in the name of homeownership.

Republicans often get the added benefit of eliminating unionized workers and driving their ideology of shrinking the amount of social resources under public control.

For Democrats, the benefits are more subtle. Privatization allows them to paper over the party schism between liberals and neoliberals by spending money for social aims through what is, essentially, an off-balance-sheet channel.

Privatization takes important governmental functions that we need, including everything from roads, mass transit, national defense and prisons, and turns them over to corporate interests whose goal is to make the most money at the least cost.

Florida Gov. Skelator Rick Scott recently signed off on a plan to privatize prisons in 18 counties in the state. In a time when our leaders should be creating jobs, this measure has the potential to eliminate 4,300 jobs.

In a letter to the editor of the Ocala Star-Banner, Sgt. Thomas Johnson, an FDOC officer, warns the public of the risks:

We can’t effectively protect the public and ensure department personnel safety when the first thing private prison operators want to do is cut employees because it eats into their profit margins. Private prisons are required to operate at a rate of 7 percent less cost than state-operated institutions. The private prison industry also makes a profit by hand-selecting model inmates who don’t tend to cause many problems while shipping the more problematic, mental and medically needy inmates back to state-run institutions. This practice puts the bulk of the inmate’s cost back on the tax payer while corporations like GEO Group reap the benefits.

This was nothing more than a political payback since the private prison industry donated more than $1 million to the Republican Party in the last election cycle here in Florida. This also doesn’t come as a surprise since the Police Benevolent Association, which is currently the DOC’s collective bargaining representative, endorsed Alex Sink for governor.

Welcome to the predator state. In the words of economist James K. Galbraith,

Their reason for being is to make money off the state -- so long as they control it. And this requires the marriage of an economic and a political organization...

What better person to lead the predator state of Florida than a former CEO who ran a company that looted Medicare and paid a $1.7 billion fine for the crime?