Obama Takes On Market-Based Government
In a little-noted passage of a mostly ignored speech, President Barack Obama said last week that the government faced "a real choice between investments that are designed to keep the American people safe and those that are designed to make a defense contractor rich."
It was notice, amid all the caterwauling over Mr. Obama's stimulus package, that the president meant to put the kibosh on the GOP's favorite method for spreading the wealth around. A prize ox of the conservative ascendancy was about to be gored.
Under the administration of George W. Bush, you will recall, federal spending grew pretty significantly. At the same time, the number of people directly employed by the federal government shrank. One of the factors that explained the difference was contracting. Guided by Mr. Bush's dictum that "government should be market-based," federal operations under his administration were encouraged to outsource wherever they could.
Indeed, agencies were graded on how many of their duties they opened to private-sector competition. By 2005, according numbers published by Paul C. Light of New York University, contractor employees outnumbered federal workers four to one.
The new system was supposed to save money; it almost certainly hasn't. It was supposed to deliver quality; instead we witnessed the most spectacular government failures in years.
Politically, though, it did its job. For government workers, a class of citizens despised above all others in conservative mythology, the results were predictably dispiriting. For favored contractors and their lobbyists, on the other hand, the Bush years were a boom time like no other. Certain branches of the government, as per Mr. Obama's description, seemed designed merely to shovel money into contractors' pockets, and the revolving door between government and the companies that did its work spun like a giant roulette wheel.
Until they were bumped off the front pages by the unfolding economic disaster, the many failures of government-by-contractor made for riveting stuff. There was the 22-year-old accused of selling lousy munitions to our allies in Afghanistan. There was also the contractor feeding frenzy in the aftermath of Hurricane Katrina.
But things have changed. These days it doesn't even look like banks can be "market-based," much less government. Republican leaders have rediscovered their distaste for wasteful spending. Contractor bad-boy Blackwater has renamed itself "Xe," perhaps on the theory that it will be more difficult for the media to criticize their doings when readers confuse them with the symbol for the element xenon. And Mr. Obama announced his plan to reform the contracting system.
To judge by his rhetoric, the president was declaring the end of the era of government-by-contractor. "Far too often, [government] spending is plagued by massive cost overruns, outright fraud, and the absence of oversight and accountability," he said. "In some cases, contracts are awarded without competition. In others, contractors actually oversee other contractors."
In an accompanying memorandum, Mr. Obama called for new rules specifying exactly when contracting is appropriate -- since "always" is no longer an acceptable answer -- and also for a "review" of "existing contracts," by which we can only hope he means a thorough and public examination of the most outrageous contractor misconduct of the last eight years.
If so, it's easy to get an idea of where to start. The Senate's Democratic Policy Committee, which has been investigating contractor misbehavior in Iraq since 2003, has unearthed important details about the failure of Parsons Corp. to complete more than 20 of the 150 medical clinics it was hired to build in Iraq. The same committee heard from Bunnatine Greenhouse, a whistleblower who charged the Army Corps of Engineers with an unseemly affection for KBR, the company that manages military logistics in Iraq; and it also furnished a platform for Charles Smith who once oversaw one of KBR's big contracts and who asserted that, after KBR had turned in a billion dollars worth of "unsupported charges," the Pentagon blew by his objections and paid up.
This last fellow eventually concluded from his experience that "The interest of a corporation, KBR, not the interests of American soldiers or American taxpayers, seemed to be paramount." It could be the epitaph for an era.
There have always been government contractors, of course, and no doubt there always will be government contractors. But the way Washington manages its contracting isn't static or eternally unchanging. During the last administration, in particular, it was soaked in ideology, from the right's frothing against the federal work force to its cult of outsourcing.
As we embark on the greatest spending program since World War II, getting away from all that is a form of "post-partisanship" that even I will welcome.
Thomas Frank's column, The Tilting Yard, appears every Wednesday at OpinionJournal.com
Also in Opinion Journal:
Thupten Jinpa: It's Not Hard for China to Satisfy Tibet
Laura D'Andrea Tysoon: In Defense of Obamanomics
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Whether or not it is "cheaper" is not the only consideration in the privatization of governmental functions. And it's not a capitalism vs. socialism issue. There are certain activities that should remain the province of the Government (i.e., the old rah rah "Of the People, By the People and For the People) and thus subject to more direct control (by the voters and by proxy through their democratically elected representatives).
One of them is the use of force - compulsion. This manifests itself in numerous ways from police forces, to military (i.e. Blackwater) to prisons. Privatization in these areas lends itself to corruption, lack of accountability and in certain extreme situations the threat of anarchy or sedition. Not to mention the direct harm that occurs when private contractors put their own profit and responsibilities to their owners and shareholders above those of "the people" they are supposedly hired to provide services to (i.e. military personnel deaths due to shoddy engineering and cost cutting, civilian deaths due to security forces run amok, cruelty to prisoners in systems trying to squeeze the last nickle of profit out of their contract).
This is another Change that is overdue.
It looks like we can expect a whole lot more rethugs to retire from govt in the coming months/years. They aren't going to be able to stand up against the revelations and their attempts to "bring down the approval numbers of Pelosi and Reid" or any of their other whopping great ideas are falling flat.
There isn't much chance of them out-running the illegalities once the Justice Dept gets all the paper work. Seeing them go to jail will be a real spirit-stimulus across the land.
Its going to be a long run for the Dems in govt.
Now the GAO needs to audit payments to halliburton and kbr and blackwater and get back all the money they've hosed us for.
Mr. Obama, get someone on that!
Thomas Frank, I always see WJS columists/reporters on c-span morning show, when are you coming?
You are certainly on to something. There has been a sizable media blitz of badmouthing President Obama in the past few weeks. It's much more now than his first couple weeks in office. I guess the honeymoon was over after his second week.
And all the good Christian people who supported this with their vote......
I still say let us build a family Values prison, they will come..
An entire article on Market-Based Government without once mentioning the word "Halliburton". I'm impressed!
KBR is close enough.
KBR is close enough.
kbr was a haliburton subsidiary, is now a spin-off..
It's amazing how broken our economic system really is at this point in time. The racketeers have really taken over and now we are all suffering the results.
Obama truly has his hands full in beginning to get this mess cleaned up.
I'd like to see him do a speech on ethics in American life like he did with race.
He needs to recruit all of us to start turning in the crooks to DOJ. I'm so sick of the scammers and gamesters. Cleaning up the mess and putting the crooks in jail could employ a lot of people, especially lawyers (smile).
Dont you just love it,the supposedly best and strongest economy in the world crumbled when led for the first time by a MBA holder.Fro
If ever one could attribute a viable example to the saying "You can take a horse to a stream but you can not make it drink"
You can get your kid in to the best schools of the land,but that is still no guarantee that they will be smart.
The entire contracting system needs reform and greater oversight. One point missed by both Thomas Frank and President Obama has been the fraud and abuse of all of the small business contracting programs. Anyone who is familiar with Lloyd Chapman and the American Small Business League www.asbl.c
Yeah, the Rethugs love to trot out "small business" guys at election time, but as soon as the election is over, they're thrown under the bus and the dollars are shoveled to the big guys. It's all window dressing, but they do it because the suckers keep falling for it. If Obama can reverse this, we need to remind those small business owners who made things better for them, lest they fall for Rethug propaganda again.
I am going to make another comment on this thread, but first I have to impart a chilling thought I had while reading this article.
What crossed my mind, in light of the subject of this writing is, "Can you just imagine where we would be right now had John McCain and Sarah Palin, had prevailed"?
My breakfast is in the base of my throat, at the thought. BBRRRRRRRR
I guess either the big dirty players would have doubled down and we would be steaming even faster toward the edge (If that is possible) or we would be over the edge, hit the bottom and begun to tunnel.
It is too horrible to go into any more detail. You betcha!
My guess is that we'd be about right where we are now, facing a Depression. This country is bankrupt. Obama's staying the Bush course with the bank bailouts means that between that money, and the Defense budget for one year, that we have already spent every dollar of income tax that will be collected.
We are bankrupt. And every dollar more that we give to the banksters is one more that we don't have. Obama should take back every bailout dollar and let the big banks fail. Otherwise, with the help of Giethner--who helped craft the first bail out--and Summers--who was responsible for some of the worst deregulation that caused this mess--we will see the end of this nation as we know it.
Wall Street is at the helm, and it doesn't matter who is president. This thing was carefully planned and far from over unless the American people demand that it end. Are you ready to do that?
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