Just a few questions about the GOP’s desire to place no limits on what private companies can do while chopping public sector off at the knees:
Do you really want a completely deregulated Wall Street to manage your social security account after this:
Ronald Reagan led a movement that came to power in 1980 proclaiming faith in free markets and mistrust of government. That conservative philosophy has dominated America for the past 28 years.
Even after taxpayers had to rescue deregulated savings and loans, or S&Ls, with a $200 billion bailout in the late 1980s, the push to loosen regulation paused only briefly.
In 1999, President Clinton signed the Financial Services Modernization Act, which tore down Glass-Steagall’s reforms [from the New Deal era] by removing the walls separating banks, securities firms and insurers. […]
A generation ago, banks, credit unions and S&Ls issued home mortgages that they retained on their books as an asset. The lenders had a stake in receiving full repayment of the loans from creditworthy borrowers.
But in recent years, mortgages began to be sold to firms that cobbled the loans together to create mortgage-backed securities, or mortgage bonds. Loans to the least creditworthy borrowers carried the highest risk but gave the highest returns, so banks and other institutional investors bought loads of them. Except no one was policing the creditworthiness of the borrowers. […]
When borrowers who had secured loans with adjustable interest rates, however, found their rates going up, many were unable to pay. That meant that holders of bonds backed by these mortgages were stuck with securities worth much less than their face value — or nothing at all. That created a solvency crisis for the banks that loaded up on them — and virtually all of them had.
Some regulatory agencies issued warnings, but credit-rating agencies still said that the bonds — and the banks that issued and bought them — were safe. It turns out, of course, that many were not.
“There was a view that the secondary market excesses could be prevented by the broader application of risk-evaluation models by the investment firms,” said Barry Bosworth, senior fellow in economic studies at the Brookings Institution, a Washington think tank. “In fact, risk evaluation is more of an art than a science, and the (private-sector) institutions fooled themselves,” said Bosworth, a former adviser to President Jimmy Carter.
Read more: http://www.mcclatchydc.com/2008/09/15/52559/wall-street-crisis-is-culmination.html#ixzz1GlTd8gNM
Or this
In March 2008, a dramatic spike in food prices led thousands of people on the brink of starvation in Egypt to violently riot — sending a seismic shock wave through the Mubarak regime. After the Egyptian military was able to distribute enough wheat to dispel the rioting, efforts to stockpile wheat by the Mubarak government have failed, as food prices continue to hover at record highs.
At issue are the still deregulated commodity markets ushered in by the Clinton administration and the U.S. Congress with the passage of the Commodity Futures Modernization Act of 2000. Before this law, the Commodity Futures Trading Commission (CFTC) served as a cop on the beat, enforcing rules that prevent the distortion or manipulation of prices beyond normal supply and demand. But Wall Street banks and companies such as ENRON and British Petroleum were determined to make a lot more money from speculation by exempting energy-derivative contracts and related swaps from government oversight.[…]
For this reason, the 2000 law allows entities that have no stake in whether adequate amounts of food and fuel are available for ordinary people and commodity-dependent businesses to make huge sums of money by gambling with other people’s money.
Soon after passage of the 2000 law, “dark” unregulated futures trading markets emerged, most notably the Intercontinental Exchange (ICE) in London — created by Wall Street and European investment banks and several oil companies. A key practice involves “over the counter index trading” in which hundreds of billions of dollars of pension, sovereign wealth, and other institutional funds are used to flood “dark” commodity markets to buy and hold futures contracts without an expiration date or oversight. When it’s time to make money on a losing bet, these funds are withdrawn, causing commodity price crashes and economic instability.[…],p.
Some world leaders are willing to speak out against the pernicious role of “dark” commodity markets. Recently, French President Sarkozy warned of further unrest and even war at the Davos forum, unless commodity speculation is reined in — something that Wall Street and Republican lawmakers are bitterly fighting.
Do you really trust corporations to do everything for the military after this?
More than 240,000 contractor employees, about 80 percent of them foreign nationals, are working in Iraq and Afghanistan to support operations and projects of the U.S. military, the Department of State, and the U.S. Agency for International Development. Contractor employees outnumber U.S. troops in the region. While contractors provide vital services, the Commission believes their use has also entailed billions of dollars lost to waste, fraud, and abuse due to inadequate planning, poor contract drafting, limited competition, understaffed oversight functions, and other problems. […]
The single greatest beneficiary of the U.S. wars in Iraq and Afghanistan is KBR, the former Halliburton subsidiary. KBR has been paid nearly $32 billion since 2001. In May, April Stephenson, director of the Defense Contract Audit Agency, testified that KBR was linked to “the vast majority” of war-zone fraud cases and a majority of the $13 billion in “questioned” or “unsupported” costs. According to Agency, it sent the inspector general “a total of 32 cases of suspected overbilling, bribery and other violations since 2004.” […]
KBR is at the center of a lethal scandal involving the electrocution deaths of more than a dozen U.S. soldiers, allegedly as a result of faulty electrical work done by the company. The DoD paid KBR more than $80 million in bonuses for the very work that resulted in the electrocution deaths.
Do you really want to turn our prison system over to private companies that cost more and are less secure?<p
Although private prisons have been sold on economic grounds, a study this year by Arizona’s own Corrections Department questions whether such facilities can even deliver in terms of cost savings, reports the Arizona Republic. The state’s cost study showed that it’s often more expensive to incarcerate inmates in private prisons than in state-run facilities, despite the savings that private operators typically promise. “The cost of housing a medium-security inmate is $3 to $8 more per day in a private prison, depending on what assumptions are made about overhead costs to the state,” according to the story. How did this happen? According to some observers, it’s because private operators often low-ball their operating costs when presenting their case to the state. […]
In fact, the reason that Arizona is taking a second look at its private prisons right now is because of a high-profile fugitive case: Three inmates escaped from a private facility last month and are believed to be responsible for two murders during their flight, having only been captured last Thursday. This is just the latest episode in a long history of scandals that have plagued private prison operators, including charges of prisoner abuse in adult and juvenile facilities.
What about education? You really want to privatize the public school system (i.e., charter schools) after results like these?
What could be wrong with promoting charter schools to compete with public schools? Why shouldn’t we demand accountability from educators and use test scores to reward our best teachers and identify those who should find another job?
Like the grand plans of previous eras, they sound sensible but will leave education no better off. Charter schools are no panacea. The nation now has about 5,000 of them, and they vary in quality. Some are excellent, some terrible; most are in between. Most studies have found that charters, on average, are no better than public schools.
On the federal tests, known as the National Assessment of Educational Progress, from 2003 to 2009, charters have never outperformed public schools. Nor have black and Latino students in charter schools performed better than their counterparts in public schools.
This is surprising, because charter schools have many advantages over public schools. Most charters choose their students by lottery. Those who sign up to win seats tend to be the most motivated students and families in the poorest communities. Charters are also free to “counsel out” students who are unable or unwilling to meet expectations.
A study of KIPP charters in the San Francisco area found that 60 percent of those students who started the fifth grade were gone before the end of eighth grade. Most of those who left were low performers.
(Gee, even with all those advantages of getting to select their students and kick out any under-performing students at will, charter schools still couldn’t outperform public schools.)
But governments contract with private companies for a lot of other services that could perhaps be done better and cheaper in-house. Like maintaining computers, for example:
No industry has gone through greater outsourcing catastrophes in the past year than government IT. Last fall, Texas cut short its seven-year contract with IBM, an $863 million deal that called for IBM to provide data center and disaster recovery services for 27 state agencies. When an audit criticized the state’s Department of Information Resources for lax oversight, inadequate staffing and sloppy service, the partnership fell apart. In Virginia, the state’s 10-year, $2.3 billion IT contract with Northrop Grumman to run the state’s computers, servers, e-mail systems and help desk services also has been plagued by inadequate planning, cost overruns and poor service.
Technology plays such a critical role in the storage and delivery of vital data that even minor delays and deficiencies can disrupt business operations, such as car registration renewals, and unemployment and medical care services. In August, a storage area network failure in Virginia knocked two dozen state agencies’ computer systems offline in another devastating blow to the state’s IT outsourcing contract. A week later, the state Department of Motor Vehicles still couldn’t process drivers’ licenses at customer service centers because databases were down.
Or development projects that seemingly fail time after time after time:
Those risks extend beyond the technology world. In 2009, in the wake of an audit of economic development agreements between Niagara Falls and two developers, New York state Comptroller Thomas P. DiNapoli discovered that the projects faltered because the city failed to monitor development contracts. One of the projects, a downtown retail mall, has been vacant since 2000; the second project, which began in 1997, yielded nothing more than a rudimentary building foundation.
<b“Before governments hire outside contractors, it’s important to examine the cost-effectiveness,” says Nicole Hanks, deputy press secretary of the state comptroller’s office. “More times than not, it’s less expensive to use state workers instead of outside contractors.”M
Less expensive and more efficient to use government workers. Who knew, just like who knew private enterprise would cheat and steal and defraud state and local governments whenever possible:
West Virginia was just one stop in a nationwide conspiracy in which financial advisers to municipalities colluded with Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., Lehman Brothers Holdings Inc., Wachovia Corp. and 11 other banks.
They rigged bids on auctions for so-called guaranteed investment contracts, known as GICs, according to a Justice Department list that was filed in U.S. District Court in Manhattan on March 24 and then put under seal. Those contracts hold tens of billions of taxpayer dollars.
And of course, private insurers and pharmaceutical companies would never attempt to defraud government programs like Medicare–or would they?
Sept. 2, 2009, WASHINGTON, DC. — The decision by a Pfizer sales representative in Florida to file a whistleblower (“qui tam”) lawsuit in 2003 kicked off the federal and state investigations that led to Pfizer’s record-breaking $2.3 billion settlement today.
“In the Army, I was expected to protect people at all costs,” said the whistleblower, John Kopchinski, a West Point graduate and Gulf War veteran. “At Pfizer I was expected to increase profits at all costs, even when sales meant endangering lives. I couldn’t do that.”
The largest piece of the settlement — $1.8 billion – is solely due to Pfizer’s improper “off-labeling”marketing of Bextra that Kopchinski exposed through his qui tam lawsuit. Pfizer is paying $502 million to settle civil charges and an historic $1.3 billion criminal fine both relating to Bextra marketing.
The FDA approved Bextra to treat arthritis as well as menstrual pain in very limited doses. Kopchinski alleged in his qui tam lawsuit — which the government joined — that Pfizer promoted Bextra for uses and in doses that far exceeded what the FDA had approved. This put patients at risk for serious health problems such as heart attack, stroke and pulmonary embolism (blood clot in the lung). The lawsuit also said that Bextra paid doctors kickbacks in various ways to influence them to prescribe and endorse Bextra for these “off-label” uses. Bextra was withdrawn from the market in 2005.
Or for profit group purchasing organizations (GPOs or hospital purchasing company) gouge Medicare like this:
We found that the three GPOs we reviewed collected $1.3 billion representing net revenue in excess of operating costs. The GPOs retained $415 million of the $1.3 billion in net revenue to provide reserves and venture capital for new business lines. They distributed the remaining $898 million to members. We also found that the GPO members we reviewed did not fully account for the net revenue distributions on their Medicare cost reports. GPO members generally offset rebates on their Medicare cost reports as required. We recommended that CMS (1) provide specific guidance on the proper Medicare cost report treatment of net revenue distributions received from GPOs, and (2) prepare a “frequently asked questions” or other bulletin to remind institutional providers that all rebates from vendors must be shown as credits on their Medicare cost reports.
Now ask yourself one simple question. What will happen of the Republicans at the state and local level pass laws that privatize more or even most government services, even essential services, i.e., teacher, police, firefighters? What if, as in Michigan, they plan to turn entire municipal governments and school districts over to private companies to milk the people who live there for all they are worth?
Because that is their game plan. Just like they pillaged Iraq, they intend to pillage Main Street America. And believe me, the hedge fund managers, Banksters and CEO’s of major companies are not going to be the ones taking the fall when the cow manure hits the fan. They are predators after all. They eat what they kill. To them all you and your money represents is a piece of meat to be stripped to the bone.
And guess who they hired as their bagmen? Some Democrats, yes (more than we’d like to admit), but mostly its the entire Republican party. And no one except you and I stand in their way.
Nothing personal, mind you. It’s just business.