The Thinker

So many privatization opportunities abound

Unless you live in the state of Virginia, you may have missed the news that our ubiquitous state owned ABC (Alcoholic Beverage Control) stores may be going the way of the dinosaur. Governor Bob McDonnell promised in his campaign to turn them over to the private sector. He says that the private sector would run liquor stores much more efficiently than the government. In addition, by selling more liquor these private stores would generate additional revenues to help address Virginia’s chronically under funded transportation system. This sure sounds sweet.

Yet, the governor recently ran the numbers again. Maybe turning over ABC stores to the private sector won’t be the VDOT’s salvation after all. While McDonnell swore he would not raise taxes, he did recently float the trial balloon of adding a “fee” to alcoholic beverages sold in the state. A “fee” apparently is not the same thing as a tax. This tax fee should help make up the $250 million dollars in revenues brought in across the state by these ABC stores. Wow! That’s a lot of fees!

It’s unclear to me what the advantage of turning over these ABC stores to the private sector actually is. Whether it does or does not save money seems to be beside the point. A good Republican, after all, believes that the private sector always operates more efficiently than the government. ABC stores were created after prohibition was repealed to control the hard liquor-drinking problem in the state as well as to assure that the state got its proper share of taxes on alcohol. If ABC stores are decommissioned, presumably, I could pick up a bottle of Jack Daniels at the local Shoppers Food Warehouse and save myself a trip to the state owned package store.

It strikes me that state owned package stores are just the tip of the “socialist” iceberg that enlightened Republicans could rid us of, thus giving us more freedom and keeping taxes low. Republicans in Congress, and particularly the Tea Party wing of the Republican Party, have their eyes on Social Security and Medicare. The latest groupthink seems to be that neither of these programs is sacrosanct and they can be “managed” by turning them into voucher programs. Send recipients vouchers and let them buy an annuity or old age health care with their voucher through this magic called shopping around for the best deal. If the voucher doesn’t quite cover living expenses to the same degree as the government has, well, that’s too bad but that’s better than “socialism”. At least costs are contained and thanks to the magic efficiency of the private sector, somehow people will be able to buy much more value with their vouchers than through some sort of “socialist” government-run program.

Republicans for years have been advocating for parents to use vouchers buy their way into private or charter schools instead of their local public school. Why settle for mediocre public schools, goes the thought, when some private charter school around the corner will give better results for less money? Likely, their staff would not belong to any stinking teachers’ union. This would help drive value, although it might also depress teachers’ wages.

Why stop with public schools? Why have public colleges or universities? Surely, the magic of the private sector can work its magic if they too were privatized. To a good Republican, even an institution as renown as Texas A&M should be on the chopping block. If the horror of socialism existing in our public schools can be dealt with through the magic of vouchers, surely “socialist” public colleges and universities can be run more efficiently as well if sold to the private sector. After all, tuition increases far exceed the cost of living. Something must be rotten in our public universities and competition is surely the solution.

Strangely, it doesn’t appear that private universities offer a better deal. The Washington Post, whose holding company also owns Kaplan University, calculated that students pay nearly four times as much from Kaplan for an associate’s degree in business administration as do students attending Northern Virginia Community College ($33,390 vs. $8500). It is also true that the state subsidizes NVCC and other public universities, but clearly not so much as to make up the staggering difference between NVCC and Kaplan. From all the evidence, it appears that public colleges and universities offer a much better value for students than private colleges and universities.

Clearly, NVCC is not in the business of making a profit, unlike Kaplan, whose shareholders want regular stock dividends. Kaplan may be targeting those who need more flexibility in their educational schedules and don’t mind paying extra for the privilege. Most students finance at least a portion of their education. Since our “socialist” governments seem to be in the student loan business, they are essentially funding many students’ private educations. Yet while nationwide only ten percent of college students go to private universities, 44% of student loan defaults happen to students attending private universities. Could it be that private universities care more about profits than whether their students actually graduate?

Nonetheless, public universities should be a choice target for Republicans. Why not just issue tuition vouchers for students to use where they want and privatize our public universities as well? Shouldn’t it just invigorate competition in the educational marketplace and thus drive down costs? Oddly, it just doesn’t seem to be working out that way. Private universities seem to be targeting the high-end market, not the low-end. It looks like outsourcing our public colleges and universities would only make college less affordable to those who need it the most. But when ideology is more important than facts, why be bothered? Think of all the money taxpayers could save by not maintaining those colleges, universities and public schools. Just give them a voucher if they whine and let people shop around!

If they return to power in November, there are all sorts of opportunities for Republicans to deliver on their privatization agenda. I was going to suggest that our public roads could be turned over to the private sector, but that’s already underway here in Northern Virginia, where High Occupancy Toll (HOT) lanes are being added to the Capital Beltway, ensuring that the well moneyed won’t have to deal with the inconvenience of traffic. VDOT can no longer be bothered to run the Dulles Toll Road, and turned it over to the local airport authority. Prisons are also being outsourced in many states; the Corrections Corporation of America apparently provides cells for many if not most Arizona prison inmates. In addition, as the Bush Administration demonstrated, war can largely be outsourced these days too. Ask Blackwater. Their stockholders did quite well in the last decade, although the value of their services looks suspect. Even the Obama Administration is getting into the outsourcing act. It wants the private sector to provide rockets to ferry astronauts into space. Curiously, most Republicans are against the idea. It’s probably because it was proposed by a Democrat.

In any event, we have just scratched the surface at innovative ways to reduce “socialism” here in America. It is true that Thomas Jefferson might roll in his grave at Monticello if his beloved public University of Virginia went private, but when it comes to ideology we must not let two hundred years of tradition and a dead president’s feelings stand in the way of innovating the private sector.

It simply has to be all for the best!

 

Leave a Reply

Switch to our mobile site