Archive for Saturday, February 26, 2011

House approves bill to analyze privatization

February 26, 2011


— Proponents of outsourcing more government functions to the private sector got a boost in the House on Friday.

The House approved, 68-51, a bill setting up an 11-member council on privatization that would evaluate and advise the Legislature on opportunities for state agencies to outsource when cost-effective.

Rep. Marvin Kleeb, R-Overland Park, said Gov. Sam Brownback, a Republican, supported the bill.

Rep. Mike Burgess, R-Topeka, said House Bill 2194 would set up a logical process to determine whether a move toward privatization made sense.

“Before we embark on any privatization, this would provide us with a business case,” Burgess said.

Rep. Joe McLeland, R-Wichita, added an amendment to include looking at privatization possibilities in higher education. Earlier this week, McLeland succeeded in putting a provision in the proposed budget that would require the Kansas Board of Regents to conduct a study on whether to privatize functions and services at higher-education institutions.

But opponents of the bill said it was a waste of time and money.

Several legislators said it was unknown how much the legislation would increase staff work in state agencies. They also said the council would draw expenses for meetings.

“You vote for this, you’re going to grow government, and you’re going to issue a blank check,” said Rep. Eber Phelps, D-Hays.

Some senators were skeptical too. Senate Vice President John Vratil, R-Leawood, questioned the wisdom of creating a government panel “to shrink government.”

Jane Carter, executive director of the Kansas Organization of State Employees, said the bill was one of several approved by House Republicans that would hurt state workers.


Richard Heckler 7 years, 2 months ago

Almost always elected officials are the most uninformed people on the block. There are few exceptions and I mean few.

Privatization = big government giving away tax dollars = Grover Norquist and Koch Thinking

Privatization is:

  1. CEO's
  2. shareholders
  3. golden parachutes
  4. maybe corporate jets
  5. over charging taxpayers

Richard Heckler 7 years, 2 months ago

David Stockman - "GOP guiding nation towards financial ruin"

"In 1982, 1983, and 1984, Reagan signed a series of tax hikes (PDF) that, according to Stockman, recovered 40 percent of the original 1981 tax cut. Meanwhile, unemployment fell from nearly 11 percent in 1982 to 7.4 percent by Election Day 1984, and inflation slowed."

Years later, Stockman says, George W. Bush and his crew repeated "in much greater magnitude the errors we made in the early '80s. A massive increase in defense spending, a massive reduction in the revenue base [via long-term tax cuts], and not even an effort at spending cuts. Then the economy finally collapsed as a result of the credit crisis."

So what's an old-school Republican to do? Stockman, who worked as an investment banker after leaving the Reagan administration (and was indicted in 2007 for securities fraud in a case federal prosecutors later dropped), is willing to live by the basic laws of math.

He opposed extending the Bush tax cuts for middle- and high-income Americans, and now he has a simple three-part prescription: First, cut military spending by $100 to $150 billion a year. Stockman considers both the Iraq and Afghanistan wars foolish.

His second point is classic deficit-hawkery: Apply a means test to Medicare and Social Security.

His third: "Massively raise taxes." His favorite device: a Tobin tax, named after Nobel Prize-winning economist James Tobin, which would be levied on financial transactions.

"There's no productive value for Main Street or the real US economy." Such a tax could generate $100 billion annually (PDF). Stockman also fancies a version of Europe's value-added tax on consumption. "High taxes aren't good," he says. "But at the end of the day, you have to pay your bills as a government."

Stockman has not suddenly turned into a Democrat: He didn't support Obama's stimulus (because he didn't think it addressed the fundamental problems of the economy), and he remains a small-government conservative who would slash all sorts of federal programs if he could. But he has no patience with today's Republicans. On MSNBC's Countdown, he called the GOP "the free-lunch party of tax cuts."

Stockman counters that Republicans' taxes bad/tax cuts good mantra is disingenuous. "I don't think those kinds of propositions are appropriate, and you could call them a lie if you really wanted to use rhetoric," he says. "They can't say government is too big if they're saying hands off defense. It's not responsible to say government is the problem when you've embraced 95 percent of the dollars.

"It's very dismaying," he adds, "to see that 30-year descent into the kind of nihilism, know-nothingism that is represented by the Republican Party today." It's not the Gipper's GOP anymore. David Corn is Mother Jones' Washington bureau chief.

just_another_bozo_on_this_bus 7 years, 2 months ago

"The House approved, 68-51, a bill setting up an 11-member council on privatization that would evaluate and advise the Legislature on opportunities for state agencies to outsource when cost-effective."

Translation-- Find a way to allow well-connected Republicans to cherry-pick any state functions they think would be lucrative. State would get a short-term boost from the sale, but taxpayers would see rates go up more that taxes would go down, and service would suffer as the new privatized company finds "efficiencies," which really just means laying off workers.

But the silver lining is that the Republican lawmakers would have a new, steady source of campaign contributions, and future employment opportunities.

sciencegeek 7 years, 2 months ago

I find it interesting that privatization is being considered now, when the private sector has tried it and found it wanting. It sounds good, and may even look good initially, but over time, it has been found that service and productivity suffers, as the contractors place one customers' needs in the long queue with all of their other clients. As help waits its turn, the company's own employees are made more inefficient while waiting for the support that used to be immediate.

Another case of short-term thinking to make political headlines. Although the idea of plum contracts going to political cronies is a bonus.

Getaroom 7 years, 2 months ago

This is a road specifically paved to direct traffic directly to yet higher glutenous corporate profiteering. Call it what you like, Corporatization, Plutocracy, Fascism. It is the not so subtle ruin of US citizens to Democratically elect representation in government. It begins with something as seemingly innocent as trash collection and in time emerges as something like Halliburton. In the armed forces was is food services and armed paid mercenaries. When will the citizenry of this country awake to the fact that we are allowing these political demagogs to enslave us and carry us back hundreds of years. In say, 25 or fewer years ask yourselves: "how did we get back to a place that humanity had fought so hard to rise out of"? It's coming and it's already here - so wake up people!! Mass servitude is already in our faces do you really want to keep looking into that mirror? It is up to each of us to change the view.

Liberty275 7 years, 2 months ago

"Call it what you like"

OK. I'll call it "ridding us of bureaucrats".

jayhawklawrence 7 years, 2 months ago

"Privatization is:

  1. CEO's
  2. shareholders
  3. golden parachutes
  4. maybe corporate jets
  5. over charging taxpayers"

I liked your comments about Stockman, which I was aware of but you kind of shoot yourself in the head with your animosity toward business and free enterprise.

A big indicator that you have been infected with the Socialism bug.

So here we are again. Crazy people in the left and crazy people on the right and the American people just want some common sense and cannot find people in government or politics that seem to have any.

jayhawklawrence 7 years, 2 months ago

There is nothing wrong with trying to find ways to become more efficient. People are happier when they work in a place that maintains a high standard. In my experience, average salaries for workers tend to rise when the environment becomes more efficient and well managed.

I think that is the goal. Currently, a lot of state workers seem to be underpaid and the ability to improve their salaries and benefits is tightly controlled by bureacratic red tape.

I am cautiously in favor of this study.

just_another_bozo_on_this_bus 7 years, 2 months ago

"I am cautiously in favor of this study."

I'm not. And it's not because I'm wholly opposed to some amount of privatization, if it truly makes sense. But when the studies are being done with the ideological mindset that government is always bad, and private business is always more "efficient," I don't expect it to come up with any useful results. Just more corporate welfare.

Crazy_Larry 7 years, 2 months ago


Here's an example of privatization: when I was a private in the army...enlisted soldiers were paid maybe $25,000/yr to do things such as prepare meals, clean latrines, escort convoys, etc... NOW, in the new and improved (more efficient) privatized military industrial complex private contractors (Blackwater/Xi, Halliburton, et al.) are paid $200,000/yr to do the exact same thing.

Bob_Keeshan 7 years, 2 months ago

Here's the logic:

The only way to get less government is for us to create more government.

In the past few years alone, how many of these panels has the GOP created?

Some might think the electorate send the GOP to Topeka to work on jobs and the economy. Instead, all they do is attack unions, protect the unborn, and create more government commissions.

Brock Masters 7 years, 2 months ago

Generally, government can provide services cheaper than the private sector simply because government doesn't have to turn a profit to stay in "business." This, however, sometimes leads to ineffective and inefficient government programs sustained by the taxpayer life support.

The solution in these cases is not necessarily privatization. The solution is for the governor to demand that his cabinet secretaries manage their agencies efficiently and effectively.

The way that the private sector can operate a program cheaper than the state is if they:

  1. can take advantage of economies of scale
  2. better manage the program
  3. pay lower wages
  4. take shortcuts 5, deliver less services

When considering privatization, the state must consider the cost for outsourcing the service plus the cost of oversight. The government simply cannot abdicate its responsibility and must provide oversight of the contract to ensure that the terms are being met.

Privatization can be an effective tool, but the costs and consequences of it must be fully explored and understood before engaging.

Crazy_Larry 7 years, 2 months ago

If you haven't figured it out's one big 'inside job' whereby the lifer politicians are in bed with big business. They enrich themselves by taking from the poor and middle class. It doesn't matter if they're R or D. How many millionaires are in Congress? The majority! How can millionaires represent the poor and middle class? They do what's good for their portfolio and not what's good for the country.

Let's look at the 2008 financial crisis (in a nutshell): at the federal level you had R's diminishing regulatory oversight on Wall Street bankers and D's insisting that everyone in Amerukkka have a home (or was that the R's). The bankers gave loans to people who obviously couldn't pay (because the D's told them to). Wall Street took those bad loans and bundled them up into trading instruments that were clearly toxic and sold them around the world--making billions. How can they sell toxic assets to the world? By paying for AAA ratings on those toxic assets of course! BTW, the ratings companies are paid by Wall Street. Once people began to realize what's going on the system collapses and the 'too big to fail' guys got bailed out by their old coworkers who're now advisers to the D's and R's. Ex Goldman Sachs CEO Henry Paulson and Ben Bernake decide it's best to bail out their banker buddies while letting the competition (Lehman Bros. et al.) go under. The CAPITALISTS brought SOCIALISM to Wall Street! And the world's economies crash and burn! Goldman Sachs et al. are now making record profits cleaning up the mess they helped create (and profited from).

Washington DC spent 8 million dollars 'investigating' the banks...Washington DC spent 40 million dollars investigating Bill Clinton's BJ! Oh and the Federal Reserve Bank has told all the states 'no bailout for you!' So states are now attempting to balance the budgets on the backs of the working and poor people. In 2010 the Wall Street banks had RECORD PROFITS! But these good patriots refuse to pay even 2% more in income tax. This is the raping of America by the rich. A cabal of insiders who're getting richer every day and consolidating more and more so they can influence government as they see fit.

Crazy_Larry 7 years, 2 months ago

Almost forgot the most important part...Washington has done little or nothing to change regulatory oversight of the big Wall Street banks so the game continues.

just_another_bozo_on_this_bus 7 years, 2 months ago

Exactly-- socialize the losses for Wall Street capitalists, and austerity measures for everyone else to finance it.

Crazy_Larry 7 years, 2 months ago


just_another_bozo_on_this_bus 7 years, 2 months ago

Pardon the spamming, but this is just too pertinent to this story

Wanna know why the Koch brothers (who own major power-generation interests in Wisconsin) really needed to buy a controlling interest in the governor there? The union-busting budget bill also includes the following--

"For example, the bill includes language that would allow officials appointed by the governor to make sweeping cuts in health coverage for low-income families without having to go through the normal legislative process.

And then there’s this: “Notwithstanding ss. 13.48 (14) (am) and 16.705 (1), the department may sell any state-owned heating, cooling, and power plant or may contract with a private entity for the operation of any such plant, with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state. Notwithstanding ss. 196.49 and 196.80, no approval or certification of the public service commission is necessary for a public utility to purchase, or contract for the operation of, such a plant, and any such purchase is considered to be in the public interest and to comply with the criteria for certification of a project under s. 196.49 (3) (b).”

What’s that about? The state of Wisconsin owns a number of plants supplying heating, cooling, and electricity to state-run facilities (like the University of Wisconsin). The language in the budget bill would, in effect, let the governor privatize any or all of these facilities at whim. Not only that, he could sell them, without taking bids, to anyone he chooses. And note that any such sale would, by definition, be “considered to be in the public interest.”

If this sounds to you like a perfect setup for cronyism and profiteering — remember those missing billions in Iraq? — you’re not alone. Indeed, there are enough suspicious minds out there that Koch Industries, owned by the billionaire brothers who are playing such a large role in Mr. Walker’s anti-union push, felt compelled to issue a denial that it’s interested in purchasing any of those power plants. Are you reassured?"

jayhawklawrence 7 years, 2 months ago

I expect my government to be constantly looking for ways to improve efficiencies.

That is what we do in the private sector every single day.

If we don't, our competition will eat our lunch.

just_another_bozo_on_this_bus 7 years, 2 months ago

Unfortunately, Republicans define efficiency primarily in terms of profiteering, corruption and cronyism.

Bob_Keeshan 7 years, 2 months ago

I bet the way you do that is by hiring more people, right? And if you can't afford your new efficiency staff, I bet you fire the staff who do the real work of your business so you can hire more and more people to analyze your efficiency.

That does sound successful.

Katara 7 years, 2 months ago

Don't you mean they'll drink your milkshake?

just_another_bozo_on_this_bus 7 years, 2 months ago

As their dictator partners fall all across the Middle East, you have wonder.

Jimo 7 years, 2 months ago

Do you suppose the winning privatization bid will come from that company that has the wild sex parties where the employees sip vodka out of body cavities no one would have ever believed you could (or should) sip anything out of? Or maybe it'll be the company that routinely electrocuted American soldiers from their shoddy work (but was given a bonus from the Pentagon)?

Trading public employees for private employees means reducing the taxpayers' bargaining power ... and inevitably paying more and/or getting less. Last I checked, Kansan unions staffed by Kansan people largely had to have their Kansas job and were thereby disadvantaged at the bargaining table, while private companies are free to shop between states (or nations) for their teat to suck, independent of any one state's contract.

just_another_bozo_on_this_bus 7 years, 2 months ago

And then the wealthy middleman will complain that high taxes on him would keep him from "creating jobs."

Brock Masters 7 years, 2 months ago

So are you saying that we are forming a new group to represent the people of Kansas to be known as the "Beer Party?"

Sounds better than the Tea Party!

verity 7 years, 2 months ago

This is just an anecdote---I used to work with a person who had been responsible for making purchasing decisions for an oil company. She told me that when they gave her a project like figuring out whether it was more economical to lease vehicles or to buy them, she would ask what it was they wanted to do and then make the numbers fit that.

My own experience has been that the so-called bottom line usually doesn't take all the factors into consideration, not just because of a preconceived outcome, but because the people looking at the figures don't know everything that goes into the job and they don't ask the people who are actually doing the job.

Case in point---I used to work for a printing company which was sending work overseas. When one of the supervisors sent a job overseas and ran the same one through the local plant, the cost came out the same. However, what was not included was the amount of errors in the job done overseas and how much it cost to correct those errors. But the CEO decreed that the work must be sent overseas.

The same thing went for rewarding employees who worked faster. The number of errors and cost of correcting them was not looked at, and I can say from the experience of correcting those errors that the time spent was considerable---much more difficult and time consuming than doing the job correctly in the first place.

I suspect that it will be found that privatization will be cheaper and we will all pay the price in higher taxes, worse service and lost jobs.

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