Dec 28 2016

The Economics of Neo Liberalism

Don’t get me wrong, there are many other aspects of Neo Liberalism that are pernicious, like their anti-democratic elitism, Puritanical Calvinism, and arrogant ignorance coupled with an unjustified and delusional sense of accomplishment, but the cornerstone foundation of their monumental temple to intellectual irrelevance is their beliefs that-

  1. Markets are rational and self regulating
  2. Private actors are better at resource allocation than Public (as in accountable to) ones

Trump’s Transistion Team Is Stacked With Privitization Enthusiasts
By David Dayen, The Nation

The traditional media has yearned of late to deem Donald Trump’s White House staff and cabinet a “team of rivals,” with wide disagreements on economic policy. I don’t really see it; despite a few variances here and there, by and large Trump’s advisers all fall in a comfortably snug ideological range, with dedication to doctrinaire conservative economic beliefs about tax cuts and deregulation. And another area of consensus sticks out: the idea that government should outsource public functions to private industry.

“Donald Trump ran on improving the lives of working families, yet he’s surrounding himself with people that want to line the pockets of corporations and the politically connected,” said Donald Cohen, executive director of In the Public Interest, in a statement.

The list includes Vice President-elect Mike Pence, a leader of ultimately unsuccessful efforts to privatize Social Security during the Bush administration, along with high-profile cabinet picks like education secretary nominee Betsy DeVos (a known advocate of steering public money to private charter schools), health and human services selection Tom Price (whose relentless advocacy for the privatization of Medicare is well-documented), and defense secretary James Mattis (recipient of almost $1 million in compensation as a board member of major defense contractor General Dynamics).

One lesser-known connection is between attorney general nominee Jeff Sessions and the private-prison industry. In October, a couple months after the Justice Department announced that they would phase out the use of private contractors in federal correctional facilities, Geo Group, one of the two dominant private-prison operators, hired two former Sessions aides as lobbyists. Sessions is expected to reverse the privatization phase-out (which wasn’t much of a phase-out at all, actually, as Obama’s Bureau of Prisons renewed a private-prison contract just last month).

But perhaps even more troubling than the cabinet choices are the less visible members of the transition policy and implementation teams. These staffers will play a key role in hiring the thousands of lower-profile policy-makers the president gets to appoint. Seeding the federal bureaucracy with privatization fans at a level closer to policy execution will facilitate the outsourcing of public functions almost as much as a directive from a cabinet official.

This suggests strong advocacy in Trumpworld for public-private partnerships, which provide additional capital for infrastructure projects but which have been sharply criticized for putting commonly used services like roads and bridges under private control. Despite claims that these setups save taxpayer dollars, they really act as a privately collected tax, paid out over decades in tolls and fees. Trump’s blueprint for the first 100 days highlights an infrastructure plan that “leverages public-private partnerships.”

The perspective of Trump’s crew can be best summed up by transition team member and former Heritage Foundation president Edwin Feulner, who said in 2013 that “any government function that can be found in the yellow pages should be a candidate for privatization.”

Companies ready to capitalize on a new era of privatization have thrived since the election, from private-prison firms to for-profit colleges. Even financial institutions are salivating at the prospect of re-privatizing the issuance of student loans. Presumably Trump’s functionaries are scanning phone directories for more opportunities.

“Privatization increases inequality, limits transparency, and often times ends up costing us more in the long run,” said Donald Cohen of In the Public Interest. “We also give up control of crucial public goods and services like education and water. The American people should decide how we spend our tax dollars, not corporations.”

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