The Fort Wayne Journal Gazette has Journal Gazette | 11/25/2006 | an editorial supporting the plan of Speaker Bauer and House Democrats to review Governor Daniels’ privatization initiatives.
Bauer gets off a zinger:
“Our caucus basically does not support privatization,†Bauer said on Tuesday’s Organization Day. “We don’t support making profit out of poor people or mentally ill people.â€
The Journal Gazette notes that since January of 2005, the Indiana Department of Corrections outsourced its food services, the state has tried to privatize state park inns, the state allowed a coal company to do exploratory mining in a state wildlife area and has begun privatization of the state developmental centers.
They note the Governor being supportive of the concept of privatization:
This month, the governor defended his privatization efforts in an address to business owners in Indianapolis. He said he had heard terms like “private,†“profit†and “corporate†tossed around “as though they were dirty words.â€
“Anybody who still thinks like that really needs to get over it quick because if we’re going to be a great state … if we’re going to have real economic progress … we’re going to have to have America’s strongest, most vibrant private sector making profits,†Daniels was quoted in the Times of Northwest Indiana. “Somebody better make a profit or nobody will have a job.â€
First, Daniels is engaging in a non-sequitur. There are plenty of non-governmental activities in which profit potential abounds. Government generally engages in activities a) where it would be a disaster for profit-motivated private actors to act (see, e.g. activities related to government’s monopoly on violence — police powers, justice system, etc.); or b) where there is an obligation to act even in the absence of a good profit potential (see, e.g., care for the poor.)
Daniel Warrick of the AFSCME says that Governor Daniels refused to provide a cost-benefit analysis when the state “privatized the Division of Family Resources.” If no such analysis was done, that’s troubling because it cannot at all be taken as an article of faith that the private sector will perform a function more cheaply than the public sector. The General Assembly need not look further than the printing of its own bills for proof of this. It cost substantially more money to have a private entity print the bills than it cost the General Assembly to have the Legislative Services Agency do it.
Now, it’s always possible that pro-privatization advocates are not so much concerned about how much money is being spent, but who receives it. A politician does not benefit all that much when a bunch of public employees are being paid fairly well to do a job versus the benefits a politician may receive when similar expenditures are concentrated in the hands of friends and well-wishers with low-paid employees. But, that’s just speculation. I, like the Governor, do not have analyses to support my articles of faith. Unlike the Governor, this blog costs the citizens of Indiana nothing.
Bauer’s off center in his logic.
The objective of privatization is not to expoit poor folk. It’s to be more effecient with funds and more effective with management. With those goals accomplished, privatization is helps poor people — and everyone else.
I think Bauer knows better. He’s pandering.
You should still PROVE why privatizing the service makes sense. Waving your hands while saying “privatization is better” doesn’t count. In fact, this type of argument is everywhere in government.
When I submit a scientific paper I must have data to back up my conclusions or it will get rejected. Why should the standard be any less for the governor?
Yes, Bauer was taking a shot at the Governor that didn’t really go to the merits of privatization (or lack thereof).
But, like Jeff says, you have to show that your privatizing is actually going to do some good. That cannot at all be a default assumption.
Jeff, I realize you want proof or hard data to prove a private firm can operate more efficiently than the Government, and I’m sure that is available as most firms wouldn’t take on a project without a plan.
I do find it hilarious from a common sense standpoint that ANYBODY would think the State would be more efficient than the worst run for profit corporation.
I can’t understand why so many hoosiers would rather pay higher taxes and fees forever and ever by letting our legislature just keep on doing the same old inefficient things. I always new Indiana was not real progressive, but the last couple years have proved we’re downright reactionary.
Doug, you mention in your original article about the printing contract one key thing: the contract was done at a high rate per page (I presume above the market rate), with a politically well-connected vendor.
To me, that’s not privatization, that’s pork. We all know pork doesn’t work.
Given the handwringing state employees are doing about the move to merit-based pay (as opposed to seniority-based pay), they don’t do themselves any favors from a PR perspective – they come off as feeling entitled to their jobs.
Jobs for all Hoosiers are facing cutbacks & outsourcing, so exactly why state employees are exempt from the same issues is beyond me.
As far as Bauer, he’s doing nothing but grandstanding – but is that anything new?
The problem I see with all of these arguments in favor of privitization is the basic defination of “effeciency.” When it comes to government service, there are other types of effeciency to be taken into consideration besides the fiscal variety.
Government would be much better served by simply eliminating the practice of putting party wonks and cronies in charge of the various departments. This mixture of arrogance and ignorance at the top almost guarantees failure.
There is nothing inherently wrong with merit-based pay raises, either. The problem is that those calling the errant shots are the ones getting the raises, while those doing the real work get squat.
Tim,
If the data is so readily available then why wouldn’t the governor provide a cost-benefits analysis? I think the reality is that the governor thinks, as yourself, that the government is ALWAYS more inefficient than the private sector.
I find that argument ridiculous and insulting to many hard working civil servants – including our military…
Jeff Pruitt,
In Tim’s defense, he stated elsewhere that empirical evidence relevant to a discussion would already be in the heads of educated individuals when the conversation commences.
If he wasn’t being facetious (to what end, I won’t speculate), then I guess this is variant of the old saw: “For those who understand, no explanation is necessary. For those who do not, none is possible.”
I guess we’re not part of the in-crowd that gets to see these persuasive facts.
Nobody actually answers Doug’s or Jeff Pruitt’s questions — they just repeat the holy mantra of “privatization GOOD”! Persuasive.
Joe,
Regarding handwringing and a sense of “job entitlement” among state employees, you might be overlooking — ironically enough — market forces at work. :) Consider the common observation that pay scales for most government employees (particularly state and municipal) are significantly less than those for equivalent work in the private sector — hence the sinecure Ivy Tech jobs for members of the General Assembly and Mitch Roob’s plans for a self-arranged promotion to the same.
Now, if the functions the state provides really are essential — or essential enough that your tax base is willing to support them — how can you ensure retention without increasing pay? Benefits like good health care plans are one example.
Another could be job security. Those of us who have worked in volatile labor markets (ever had your job outsourced to India?) might well decide to choose a job with better security at less pay over one with greater pay but less stability.
I don’t know why it is that armchair capitalists will take it as granted that high-yield investments are typically high-risk as well, and yet doubt the existence the same phenomenon when applied to labor markets. Not only that, they characterize any observations of same as subversive and vaguely un-American. I’m sure it doesn’t gall them any that they behave exactly as Marx would have predicted. ;-)
Branden:
Doug’s example with the LSA seemed more pork than privitization.
If increasing pay/benefits for state workers means better, more productive workers who will be worth what they’re paid, I’m for it. As far as the tax base, I don’t think they’re willing to support it, however – you’ve got homeowners screaming for property tax relief, meanwhile the new Speaker of the House wants to take $300 million off the books in revenue without mentioning where either the replacement money will come from, or where spending will be cut. (I can only hope Bauer doesn’t work for the School of Finance & Accounting at Ivy Tech.)
I think where some of this comes from is the differing perceptions we have of state employees. For instance, Doug has personal experience with the folks at LSA who (and I don’t think I’m putting words in Doug’s mouth here) are very hard working in his experience.
Contrast that with the experiences I have with government workers, folks who close offices ten minutes before the scheduled close time because, to deal with you, they might have to work past 5pm, or the folks who work at any license branch I’ve ever been in. Both folks I know of who moved into state government jobs are there because, frankly, they couldn’t hack it in the private enterprise system.
If I was exposed to folks like Doug deals with, I might well feel different.
Joe,
I suppose a lot does have to do with government employees you know, because it forms the basis of anecdotal judgments.
Two friends of mine work for the IMCPL system, and one for the state Attorney’s General’s Office. My impression of these folks is that they work hard and take their jobs quite seriously.
There is dead weight in all sorts of organizations, and I have seen it first-hand even in very small private firms with tight margins where you’d expect them to shed it.
I suspect people a priori expect government or unionized jobs to have less-productive employees, so that’s where they look for poor productivity, and are unsurprised when they find it.
In my view, a null hypothesis that supports one’s own prejudices isn’t very useful.
On a different LSA topic, Marcia Oddi of the Indiana Law Blog has been following some disturbing trends in stewardship of the Indiana Code.
Here’s one article on the subject.
I found my way to Doug’s blog via Marcia’s. I think she provides an awesome resource and is a treasure to the state.
We had a bit of dead weight, a lot of pretty good employees, and a few extraordinary employees. And, it was also a bit hard to judge. Some of the folks who didn’t work terribly hard were the most effective at their jobs. They simply knew the jobs better and could deliver great results efficiently. There were one or two who worked really, really hard but didn’t do the job very well.
There weren’t too many clock watchers at LSA, simply because schedules had to be flexible. During session, you could put in 80 hour weeks. During the summer, particularly early in the summer before the study committees got going, it was dead and it was a great opportunity to use some of your accumulated flex time.
It was a pretty good place to work while I was in my mid 20s. Nobody minds if you don’t come home at 6 and then you get to go on some pretty extensive vacations in the summer. I think it would be kind of tough for an individual who had a family.
Marcia Oddi does a great job with the Indiana Law Blog. I believe she worked for the Legislative Services Agency quite some time before I started there.
And just one small correction — she was discussing the stewardship of the Indiana Register as opposed to the Indiana Code. The Indiana Code is a codification of the statutes enacted by the legislature. The Register reports (primarily) on actions taken by the various administrative agencies.
Doug,
Whoops. I got that story confused with one she had more recently about the General Assembly not archiving the video of state House and Senate floor events.
I can only plead extenuating circumstances based on the fact that Marcia brings so much stuff to my attention that I can’t keep it straight. :)
I should add that the recent video archiving story I was thinking of was this one, and that (at least in this story), Marcia didn’t suggest that it would or should be the LSA handling this task. I don’t know enough about the operations of the Indiana General Assembly to say. I know of no other agency that would handle it, but that’s not saying much.