From September of 2004!

11/07/2008 01:54 pm ET Updated May 25, 2011

I want to share something I wrote in September of 2004.

It is a foreshadowing of what was to come.

I wish I was not so prescient about this.

And I just shudder at the thought that Social Security was almost 'privatized' by the outgoing administration, given the financial crisis we are currently experiencing!


Bush's 'Ownership Society' Will Lead to an Ownerless Society

An Attack on the American Social Contract

Trust has been the basis for American stability and democracy. We have been taught to place faith in government as a moral authority to protect our rights, interests and well being. The Bush administration is currently convincing us to leverage assets into debt, invest and buy in prescribed ways, and direct our patronage to their trusted 'providers'. Our well being is slowly, but consistently, deteriorating, for a variety of seemingly valid reasons. When bad news arrives, we are told to follow their solution to the situation, but over time, it still gets worse. We are stuck, because our systemic ties cannot be severed without resulting in our own demise.

We have fallen for a confidence scam, perpetrated by those supposed to act in our best interests. These confidence artists coincidentally have the power of law and, as such, are untouchable: Welcome to President Bush's Ownership Society, a complete reconstruction of the American social contract.

Conservatives in the Republican Party bluntly admit they want to drastically cut domestic spending and transfer payments, but they cannot until the existing system is collapsed. In other words, they want to create a gaping hole where the only way to fix it is complete reconstruction. Since many programs on their chopping block are sacred political cows, indirect attacks are the best way to achieve the outcome. Hence, they seek to cut taxes, increase spending and let the implosion occur, setting the basis for privatization and reduction of government services. This is neither compassionate nor conservative.

Bush's solution: turn over inefficient government programs to private industry, creating "ownership" -a code word for privatization. While the solution sounds logical, it is really not. It is a Trojan horse designed to change the American dream of equality, opportunity, and assistance.

Beware of the word ownership. It is meant to connote all things good with Democracy and capitalism. And ownership is good, if one has clear control and title over property, as with homes. But the concept of ownership cannot be used for a share of social and domestic programs, like Medicare, education and Social Security. They are, instead, a right or endowment. It is impossible, by definition, to 'own' a right or endowment, you are entitled to receive prescribed benefits, but they are not real property.

As a former lifelong Republican, I find this attack horrifying and immoral; I am financially and militarily conservative, but socially moderate. I believe we have an ethical duty to help the less fortunate and ensure a level playing field bestowing equality of opportunity. I am a successful entrepreneur, becoming wealthy from a low income background. As such, I understand that equality of outcome cannot be guaranteed, and I am not opposed to privatization for its own sake. To the contrary, privatization can create tremendous benefits through efficiencies, lower cost structures, and increased competition. However, large corporate recipients of private contracts maintain strong profit motivations which (in cases of providing crucial social services to the masses) may be opposed to the greater good of the country when conflicts of interest are created or hard decisions are required. This is particularly true when such recipients are "friends, family, business associates, and donors" of those granting the contracts, an extremely frightening trend of the Bush administration.

Bush's strategy behind ownership is insidious. Let a problem fester, set unreasonable standards, do not fund the solution (remember No Child Left Behind, setting standards without the funds to meet them), and make the case that the only fix is privatization. Then, irrationally spend until prophesy fulfills itself. Every act of privatization will happen in response to a catastrophe, and always it will be represented as the best way out of the problem.

'Ownership' will lead to:

* slashed benefits,
* creation of surrogate government agencies within private enterprise,
* regulation developed by the special interests meant to be controlled,
* political handouts, and
* enhanced power of the executive branch.

Privatization will be granted to regulated big business, mostly under the discretion of the executive branch. Forget checks and balances, and welcome the day of favoritism and arbitrary power. The key to membership is political donation, future jobs for public servants, and powerful lobbyists. In effect, it is government regulating intermingled special interests to benefit its inner circle. And for those that do not heed, beware of Bush's wrath. The reward for loyalty is patronage and new, privatized markets. Forget antitrust protection; there must be a willing Justice Department, which takes its instruction from the Oval office. This is the beginning of a new aristocracy in the land of democracy.

The beauty of this scheme is simplistic: the government will have more control than ever, since it has regulatory power and plausible deniability for all failures, misdeeds and accountability. All they need to do is shrug, blame the 'offenders', change the concession, and pay for it with taxpayer money in the form of a bailout. Remember the S&L crisis of the 1980s and the plundering called the Resolution Trust Corporation? Or better, the current disaster in waiting, Fannie Mae, which threatens a real estate bubble that can bring down the economy, possibly requiring the largest government bailout in history.

Further, another flash point is the insolvency trend affecting many corporate pension funds, potentially requiring yet another government bailout. Pensions are covenants, representing a portion of worker pay, made by private corporations to provide retirement funds. Under funding, slashing of benefits and malfeasance are common and reveal how many corporations with a primary earnings motive do not have the interests of the average American at heart.

Many examples exist of privatization lacking in effectiveness. Prisons, for one, have had serious problems with recidivism, human rights, and quality, and due to the sheer costs, it is almost impossible to go back. The military has privatized much of its logistics to large contractors, security to mercenaries, and intelligence to retired government officials. We all have heard about the current abuses in Iraq, but there is a lack of will to recover, censure, or make reparations for the plunder. Or it is just complicacy: President Karzai of Afghanistan was a lobbyist for Gulf Oil's pipeline plans, and does one suspect that the pipeline will be built as soon as his power is consolidated? US Voter registration has been outsourced in many places: Now there are indictments in several states regarding document shredding of Democrat registrations.

Recently, a Medicare Prescription Drug Benefit was doled out to the drug, managed care and PBM industries, representing a handout of over $100B in windfall profits. At the same time, Medicare was prohibited against using its purchasing power to negotiate better prices on behalf its recipients. Just this last week, President Bush signed a sweeping $150B corporate tax cut, causing Senator John McCain to label it the most egregious example of handouts to lobbyists and special interests he has seen in his career.

The government is proposing to privatize social security to the big banking, insurance and mutual fund concerns that are being punished for illegal market manipulation and anti-consumer behavior. Their fines have been merely passed back to their customers, and in the few cases where criminal action has been pursued, the punishment is inconsequential. This was not such a problem prior to sweeping deregulation. Two notable examples happened with energy and telecommunications: Enron and WorldCom presided over egregious accounting and financial frauds, damaging the services, financial future, and markets of millions. No jail time for the bosses, as they were large Republican donors with close political ties. Is this just a coincidence, or is it a blind eye?

This begs other questions: Can a private system really work lacking a true competitive bid process and key associates are merely awarded contracts because of who they are and political access? Does monopolistic privatization result in efficiencies and cost savings?

So, expect to see the following institutions attacked:

* Taxation and revenues, changing the basis of taxation to weaken the foundation for social and domestic programs,

* Then Social Security, abandoning our needy and entrusting their welfare to a scandal ridden industry in a nation that still does not fully take advantage of IRA and 401(k) provisions,

* Then education, furthering the class divide, spreading a faith based agenda and attacking the Establishment Clause of the Constitution which provides Church/State separation,

* Then transportation,

* Then the postal service,

* Then all of medicine and scientific research,

* Then administrative law, basic adjudication and certain aspects of law enforcement

Remaining will be a small inner circle of powerful regulators, connected to the very industries they govern, padding their future pockets based on favors and ignoring conflicts of interests. It will represent the greatest pilfering of wealth in history. And Wall Street will advocate this due to their prospective fee windfall.

Bush's ownership scheme is an erosion of the American dream and the foundation of a new aristocracy. Do not be fooled: The 'ownership economy' is the greatest pyramid scheme ever to be attempted on our great nation, the immoral dismantling of our social contract.