March 2, 2017 – President Trump is said to be preparing to privatize key public services, including the Veterans Administration (VA), public schools, and public broadcasting, expanding private prisons and launching a privatized infrastructure program.
Republicans in Congress want to go even further, to privatize Medicare, the Postal Service, National Parks, air traffic control and other functions of our government. This is on top of previous privatizations of military contracts, and even the Senate cafeteria.
What exactly is privatization, and why is it such a priority for the Trump administration?
Public Investment, Common Ownership, Public Gain
Back when our government was run by ‘We the People’, the people would make a public investment and share gains from that investment. If we built a road or a bridge, we could all use it, and our economy as a whole would benefit from this increase in transportation capacity.
Over time, as a nation we built up a wealth of “public structures,” both physical, such as roads, and institutional, such as courts and schools. These were the envy of the world. And We the People, theoretically, shared the benefits of this public wealth, and access to it.
Our public schools were open to all children. Our parks were enjoyed by millions. Everyone could drive on the highways and bridges. Public water systems brought good, safe drinking water to our homes. The list goes on.
Our businesses also benefitted from these public structures. Our transportation infrastructure let companies move raw materials and goods. Our courts protected their interests. Our financial regulations protected their investment. Our public wealth was the fertile ground of American prosperity. You could say that prosperity was the fruit of democracy.
Privatization = Public Loss For All, Private Gain For A Few
In the 1970s, corporations and conservatives launched a campaign to grab public wealth for the already-wealthy few. Drawing on the works of ideologically-driven economists like Friedrich von Hayek and Milton Friedman, they began to propagandize about the evils of government, with slogans like “government is inefficient,” “businesses do everything better than government,” “taxes are theft” and “government spending is bad.”
Of course, their real target was democracy, where We the People make decisions about how to use government. In a democracy, government spends money to try and make all of our lives better.
“Privatization” means taking public wealth and assets that benefit us all, and turning them over to the private sector, where only a few reap the reward. When you “privatize” a road or a bridge, people have to pay a toll to use it, so the new “owners” of the road can make a profit.
There is another problem with privatization. Democratic governments aim to serve as a model of what the public wants, so they try to provide jobs with good pay and benefits. When governments are talked into “saving money” by privatizing, what often happens is employees are laid off, then the private company hires new workers, or rehires the old ones, at lower wages with fewer benefits.
The result is that laid-off employees are impoverished, while new hires are also impoverished, because they are no longer paid a living wage. A local, state or national government might have “saved money” in the short term by lowering wages and externalizing costs, but the communities where these people live ultimately suffer the consequences.
Homes are foreclosed and neighborhoods lose value. Property and income taxes are reduced, there are fewer customers for local businesses, schools are stressed as children move into poverty, and the need for emergency government assistance like Food Stamps rises. So while privatization shifts benefits to a few, all taxpayers inevitably bear the costs.
Privatizers promote this kind of transfer of public wealth to private hands with claims it “saves money.” But privatization impoverishes and harms communities, which costs taxpayers more than it saves. More importantly, it hurts people, which really ought to be our primary concern.
The Trump administration has given every indication it intends to privatize as much of our government as it can, as fast as it can. It is filling the administration with people who advocate privatization. David Dayen warned about this after the election at The Nation, in Trump’s Transition Team Is Stacked With Privatization Enthusiasts. Others are sounding similar alarms.
Trump’s “hiring freeze,” for example, is really a strategy toward privatization. Lauren McCauley explains at Common Dreams, in In Step Towards Privatization, Trump Enacts Federal Hiring Freeze,
…[A]s AFGE national president J. David Cox Sr. pointed out, the freeze will “actually increase taxpayer costs by forcing agencies to hire more expensive contractors to do work that civilian government employees are already doing for far less.”
In effect, it’s a step towards privatizing the federal government.
“Numerous studies have shown that contractors are two to three times more costly than each federal employee they replace,” Cox said. “President Trump’s federal hiring freeze will result in more government waste as agencies are forced to hire high-priced contractors to do the work that federal employees can and should be doing.”
The Veterans Administration
An early privatization target of Trump administration privatization is the Veterans Administration (VA). The VA is the embodiment of “government health care.” Millions of veterans go to the VA and get care, and that’s it.
The VA is a big operation, providing care for approximately 5.8 million veterans annually, at over 160 VA medical centers and 1000 affiliated health care sites. Every year the VA handles 92 million outpatient visits, admits 707,000 inpatients and fills 271 million prescriptions.
Privatizers have been pushing “government doesn’t work” propaganda about the VA for some time. A large agency that serves millions of people will have problems, just as a large private business will. This was especially true when a surge of veterans returned from Iraq and Afghanistan. But corporate/conservative PR firms pushed out a drumbeat of bad “news” about the “government-run” VA, in ways that turned every problem into a “scandal.”
For example, when vets faced wait times for non-essential medical care, some died of unrelated causes. PR firms pushed the story that “Vets died waiting for VA care” as if the wait times were the cause.
When a sufficient blanket of anti-government propaganda has been laid down the privatizers introduce proposals for “reform” and providing “choice.” Of course the proposals are to hand over government functions for private profit.
The Trump administration is coming for the VA. The Military Times explains, in Trump considering plans for privatizing VA medical options,
President-elect Donald Trump is evaluating a radical overhaul of veterans health care options even before he finalizes his pick for the next secretary of veterans affairs.
In comments to reporters late Wednesday, a transition official said Trump is considering a “public-private option” that would allow some veterans to get all of their medical care from private-sector physicians, with the government paying the bill.
The Trump administration’s privatization strategy begins with propaganda about providing “choice” and “vouchers.” This might sound familiar to those following the school privatization fights.
What To Do
Call your Representative and Senators and let them know how you feel about privatizing the VA, and Trump’s other efforts to privatize our democratic government. Ask them for a firm, public statement on privatization generally and on the VA in particular.
More good reading:
The Privatization Scam: Five Government Outsourcing Horror Stories
The Campaign for America’s Future is the strategy center for the progressive movement. Our goal is to forge the enduring progressive majority needed to realize the America of shared prosperity and equal opportunity that our country was meant to be. www.ourfuture.org