The Bush administration, and Republicans in general, hold up privatization as -- always -- the most efficient way to use taxpayer dollars. Privatization leverages the efficiencies of the market, which, we are constantly told, always delivers the best product or service for the price. It is a disastrous myth, of course, but it is nonetheless pervasive, made purposefully so, even in the face of prima facie evidence of its falsity. What privatization does appear to be quite good at is efficiently sluicing taxpayer dollars directly to private contractors, who rarely fail to impress with bad practice, loathsome performance and outright connivance. Two examples have recently popped onto the headlines.
Exhibit A: The $600 billion Medicare privatization boondoggle, which, since its inauspicious debut, has benefited both health insurance companies and pharmaceutical manufacturers. Efficiency of the market was again the cry. And now, after 91 audits, "health insurance" companies have been found to pose an "imminent and serious threat” to tens of thousands of their own Medicare patients by improperly denying claims and practicing deceptive sales tactics while stalling on claims not already denied and failing to respond to complaints. They have ruthlessly and improperly canceled HIV and AIDS patient care. All of this is done in the name of quarterly profit margins, of course, since that is the real efficiency that the market seeks these days. On top of this egregious behaviour, government agency must constantly monitor and audit these activities because, clearly, "the market" cannot be trusted to deliver anything close to satisfactory service.
Exhibit B: Blackwater. The unprecedented growth of this Republican party outpost is a direct result of an illegal war and deep ties to the GOP and the Christian conservative movement and is hardly the result of market forces. As a House committee investigation has uncovered, Blackwater costs the State Department six to nine times what it would for an Army soldier to perform the same duties. But when US military forces are scarce and stretched, privateers leap into the void for extraordinary fees: $445,000 a year for each "protective security specialist." The efficiency of this profit margin is demonstrated by the fact that is has been the US government itself that has trained most Blackwater forces, at considerable expense, an expense that Blackwater has efficiently externalized.
But this is not the worst of it. The supposed efficiencies of the mercenary market have caused nothing but harm to the military efforts in Iraq and Afghanistan. Blackwater specifically has been a drain on US forces, not only with their contemptible disregard for the local population but for sparking the horrific campaign in Falluja, where Blackwater purposefully skimped on armoured humvees in an effort to undercut contract bidding. When Blackwater paid off the family of one of their victims to the tune of $15,000, that too will likely be paid for with taxpayer dollars, charged as an expense on their cost-plus contract.
And now, after the most recent Blackwater shooting incident, the State Department has finally agreed to a new protocol whereby State officials will now ride with and oversee the conduct of Blackwater mercs as they perform their market-blessed task of security for State Department officials for the princely sum of $1200/day. To reiterate this arrangement: Blackwater mercenaries have become such a liability that government officials will now oversee and monitor the privatized security for ... government officials.
In spite of the obvious fact that privatization results not in efficient delivery of what would otherwise by government delivered services, but, rather, in the efficient delivery of tax payer funds tuned to hefty profits, lives are lost and the true costs of the putative expeditious service are buried under a malaise of untrustworthy if not outright criminal conduct, the one thing we know deregulated privatization is capable of delivering efficiently.