Category: Privatization

This is So Not a Surprise

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In news that surprise no one, Eve Moskowitz’s Success Academy has been sued for systematic discrimination against disabled students:

When it was revealed that a Brooklyn school run by the Success Academy charter network was systematically pushing out struggling and disabled students identified on a “Got to Go” list, the company’s head Eva Moskowitz said the list was the work of a rogue principal, unrepresentative of any broader policy. Critics of the lucrative, influential 36-school network have long alleged that it maintains high test scores by pressuring parents of students with disabilities to pull them from its schools. A federal civil rights complaint filed yesterday by 13 parents along with politicians and advocacy groups bolsters the case, alleging that difficulties faced by special-needs kids are actually the result of a company-wide policy that has been in effect for years.

“Success Academy operates schools in some of the most distressed neighborhoods of this city and receives considerable public funding but fails to serve students with disabilities in accordance with the law,” Legal Services NYC direct Raun Rasmussen said in a statement. “These children deserve better.”

………

When it was revealed that a Brooklyn school run by the Success Academy charter network was systematically pushing out struggling and disabled students identified on a “Got to Go” list, the company’s head Eva Moskowitz said the list was the work of a rogue principal, unrepresentative of any broader policy. Critics of the lucrative, influential 36-school network have long alleged that it maintains high test scores by pressuring parents of students with disabilities to pull them from its schools. A federal civil rights complaint filed yesterday by 13 parents along with politicians and advocacy groups bolsters the case, alleging that difficulties faced by special-needs kids are actually the result of a company-wide policy that has been in effect for years.

“Success Academy operates schools in some of the most distressed neighborhoods of this city and receives considerable public funding but fails to serve students with disabilities in accordance with the law,” Legal Services NYC direct Raun Rasmussen said in a statement. “These children deserve better.”

 ………

The other cases all echo this one, with some variations—some parents have already withdrawn their child, one was expelled in his fourth year, and some parents, like Jackson, are still fighting to receive special education within Success schools.

Each set of allegations involves school administrators ignoring or downplaying disability diagnoses, and when confronted with them, failing to provide such support measures as small classes or paraprofessionals. When behavioral problems arise with the inadequately accommodated special-needs child, rather than reassessing, the schools allegedly suspend the kids, force parents to pick them up early, and in some cases, call paramedics to take them to emergency rooms.

 ………

Meanwhile, the State University of New York, which licenses charter schools, is planning to investigate Success’s alleged pressure tactics, according to a New York Post report.

This is how charter schools work, because this is what we pay them for.

Essentially, they get paid for high test scores, and the easiest way to do this is to make sure that under-performing or difficult students never enroll, and to make sure that those who do enroll leave.

What a Surprise: Privatizing London’s Rail System Failed

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After decades of poor and inconsistent service, incomprehensible fares, higher costs, and a lack of investment in essential infrastructure, London is moving to re-privatize its commuter rail lines:

So, last week, the Centre for London think tank published a report called “Turning South London Orange”, which argued that Transport for London (TfL) should take over all suburban rail services in the south of the capital.

 This morning, the mayor of London Boris Johnson and the British government’s transport secretary, Patrick McLoughlin, released a joint statement, saying, basically: Okay.

 Wow, that happened fast.

 Actually the statement goes rather further than that, mentioning services into six different rail terminals. They’re only proposals at this stage – “views are being sought”. Even if it does happen, TfL will only take control of different routes once the various franchise come up for renewal, so the change will take five years or more to take effect.

 But this is nonetheless a remarkable statement of intent that the capital’s rail network should be run by the capital’s transport authorities. It’s a big deal.

………

When a private rail franchise controls a route, its ultimate goal is to make money for its shareholders: running trains is the means, not the end.

By contrast, when TfL controls a route, its ultimate mission is to run lots of trains to help the city run smoothly. That’s true even when TfL’s role is contract management, and the actual trains are run by a private firm, as happens with the London Overground.

Some London train franchises have a history of cancelling train services at the drop of a hat, just because it’s easier and cheaper than letting them run late. Maybe we’re being utopian, but it’s hard to imagine a TfL-run network doing the same. Even without investment, this would be a big change.

The author notes that this is odd, given that Boris Johnson only has a few more months in office, and explains why they are moving now:

The message here is the Conservatives can be trusted to back Londoners against any big businesses that might be making their lives hell. It’s almost as if there’s an election coming up.

It’s true. Privatized rail is so sidely loathed that the even the bloody Adam Smith Institute, which describes itself as working to, “Promote libertarian and free market ideas through research, publishing, media commentary, and educational programmes,” is cheering the return of publicly owned and operated rail:

You know the trains are utterly terrible when the entire @ASI office cheers at hearing that TfL is taking over the London commuter railways.

— Sam Bowman (@s8mb) January 21, 2016

Unleashing the private sector frequently does not deliver the promised results.

H/t Atrios.

In Your Face Bill Gates

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Basically, they said that the structure of charter schools, public funds but no public review or public accountability, violate the state constitution:

The Washington State Supreme Court, in a late Friday surprise, delivered a ruling that the state’s voter-passed, billionaire-backed charter school initiative is unconstitutional.

The high court’s 6-3 ruling found that the independently organized schools do not pass muster as common public schools and therefore cannot receive public funding.

“We hold that provisions of Initiative 1240 that designate and treat charter schools as common schools violate article IX, Section 2 of our state Constitution and are void,” Chief Justice Barbara Madsen wrote in the majority opinion.

“This includes the Act’s funding provision, which attempts to tap into and shift a portion of moneys allocated for common schools to the new charter schools authorized by the Act. Because the provisions designating and funding charter schools as common schools are integral to the Act, such void provisions are not severable …”

………

I-1240 passed by a 1 percent margin in 2012, after charter schools had previously been rejected three times by Washington voters. Ninety-eight percent of its $10 million-plus war chest came from just 21 individuals. Bill Gates put up $3 million, Wal-Mart heiress Alice Walton gave $1.7 million, Vulcan Inc. (Paul Allen’s development company) was good for $1.6 million, and liberal entrepreneur Nick Hanauer donated $1 million. The father of Amazon CEO Jeff Bezos gave $500,000.

………

In another telling passage from Madsen’s opinion, the court stated: “Under the Act (I-1240), charter schools are devoid of local control from their inception to their daily operations.”

“The Supreme Court has affirmed what we’ve said all along — charter schools steal money from our existing classrooms and voters have no say in how these charter schools spend taxpayer funds,” said Kim Mead, president of the Washington Education Association.

(emphasis mine)

Of course, over at Curmudgucation, Peter Green offers a modest proposal* to deal with this ruling:

………

So, find ways to rewrite the law so that charter money can stay in its own little lock box in its own big silo. This seems a bit overthought and overwrought. The court’s decision, as I understand it, is based on the idea that charter schools cannot receive “common school” public funds because they are not overseen by an elected school board. And if that’s the case, charters can fix this very easily. Are you paying attention, charter operators? I have your solution right here.

Just submit to being overseen by an elected school board.

Act like the public schools you claim to be. Make your finances and operation completely transparent to the public.

And allow yourselves to be overseen by an elected school board instead of a collection of individuals who are not answerable to the voters or the taxpayers.

I mean– what’s more important to you? Providing a strong educational alternative for those 1,200 students, or holding on your ability to do whatever you want without having to answer to the public? Is it so important to you that you not be accountable to the public that you would rather engage in time consuming rewrites of state law, or even just close your doors, rather than let yourself submit to transparent and open oversight by a group of citizens elected by the very taxpayers whose money you use to run your school?

We already know that charter schools are prone to overpaying their founders, forcing kids out who would bring down their test scores through abuse of the disciplinary process, and ignoring federal law on disabilities, so adding oversight to ensure that contracts, discipline, and special education policies is not a bad idea.

The impetus for charter schools have come from two sources, those people determined to destroy teachers unions because they hate unions, and the financial types who see a profit center funded by the general public.

Neither of these groups can tolerate the idea of transparency or due process, because it makes it too difficult for them to accomplish their nefarious goals.

H/t Diane Ravitch for pointing me to Mr. Greene.

*Yes, this is a allusion to Jonathan Swift’s essay.

Ukrainian Humor is Odd

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Have you heard the one about how the Ukraine Prime Minister wants to reduce corruption in the country by privitizing state assets?

I’m not quite sure what the punch line is, but it’s clearly a joke: There has never been a privitization deal that has lessened corruption:

Ukraine’s Prime Minister is calling on Canadian investors to take part in a massive privatization of state assets organized by Kiev as a way of weakening the power of wealthy oligarchs blamed for spreading corruption in his country.

Arseniy Yatsenyuk cited, for instance, Ukrainian businessmen who have been “sitting like vampires” on the country’s publicly owned energy sector.

Mr. Yatsenyuk spoke to The Globe and Mail Tuesday after he joined Prime Minister Stephen Harper in Chelsea, Que., to announce that Ukraine and Canada had struck a free-trade deal.

Ukraine is preparing to spin off billions of dollars of government enterprises – including power generation and distribution assets and chemical plants – and the government wants Western investors to bring more orderly business methods to the Eastern European country.

“I don’t want Ukrainian tycoons to buy these state-owned enterprises,” Mr. Yatsenyuk said. “We would be happy to see Canadian folks buying Ukrainian assets and bringing into Ukraine good corporate governance, new investment and new jobs.

“That is what I asked the Canadian Prime Minister: ‘Please tell your investors and your businesses to jump into Ukraine.'”

Mr. Yatsenyuk said Ukraine’s leadership feels privatization and deregulation are the answers to the corruption that has plagued the country for decades.

“Big government always leads to big bribes and big corruption, so the less regulations you have the less authority the government has and the less chances to take bribes,” Mr. Yatsenyuk said.

OK, this isn’t a joke.  It’s a lie.

It’s a lie that is driven by a need to placate his masters in the west who want to buy state assets at pennies on the dollar.

It’s what Naomi Klein has called The Shock Doctrine, where, “Leaders exploit crises to push through controversial exploitative policies while citizens are too emotionally and physically distracted by disasters or upheavals to mount an effective resistance.”

To call this an anti-corruption measure is like calling a case of the Clap aid to picking up women.

You Would Have Thought that They Would Have Learned After the Ottoman Empire and the Ferme Générale Debacles………

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Or, if they don’t want to go back so far, the Chicago parking meter debacle, but history repeats itself, and Chris Christie’s privatization of the New Jersey lottery shows once again that privatizing the collection government revenues, does not produce additional revenue, it just produces waste and corruption:

The state Assembly budget committee chairman is calling for a review of the contract privatizing parts of the state lottery following a news report that the firm hired to manage the system fell short of revenue benchmarks.

Assemblyman Gary Schaer (D-Passaic), reacting to a Bloomberg report Monday that Northstar New Jersey missed its projections by $24 million in the first fiscal year of a 15-year contract, said the shortfall puts programs for seniors, veterans and people with disabilities at risk.

The premise of the lottery contract is increasing lottery revenues according to Northstar’s own projections, Schaer said.

“The administration brought in a company to work on the lottery system, and clearly the results are not what they should be,” he said.

Christie inked the deal with Northstar in July 2013, making New Jersey the third state to hire a private firm to help run its lottery in hopes of boosting lottery sales.

Four months into the arrangement, which began Oct. 1, 2013, Northstar secured a contract amendment reducing its revenue goals, according to Bloomberg. Northstar cited slowed sales from Superstorm Sandy in its request.

These deals never generate more revenue.

At best, what they do is generate a dollar today at the cost of many more dollars tomorrow.

In this case, considering that it is Jabba the Governor, it’s about payback for politically connected friends of Chris.

Hopefully, the media is over their man-crush on Christie, and and will begin to notice the morass of cronyism and self-dealing that is his tenure as Governor.

And I Would have Gotten Away With it Too, if it Weren’t for You Meddling Voters

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The very rich seem to think that democracy is a drag, because it gets in the way of their making even more money by privatizing essential public functions:

The newest bit of “wisdom” for public education comes to us from Netflix Chief Executive Officer Reed Hastings, who is a big charter school supporter and an investor in the Rocketship Education charter school network. At a meeting of the California Charter Schools Association on March 4, he said in a keynote speech that the problem with public schools is that they are governed by elected local school boards. Charter schools have boards that are not elected and, according to his logic, have “a stable governance” and that’s why “they constantly get better every year.”

 Here’s a transcript of part of the Hastings speech, published on stoprocketship.com (and you can watch the video below):

And so the fundamental problem with school districts is not their fault, the fundamental problem is that they don’t get to control their boards and the importance of the charter school movement is to evolve America from a system where governance is constantly changing and you can’t do long term planning to a system of large non-profits…The most important thing is that they constantly get better every year they’re getting better because they have stable governance — they don’t have an elected school board. And that’s a real tough issue. Now if we go to the general public and we say, “Here’s an argument why you should get rid of school boards” of course no one’s going to go for that. School boards have been an iconic part of America for 200 years. So what we have to do is to work with school districts to grow steadily, and the work ahead is really hard because we’re at 8% of students in California, whereas in New Orleans they’re at 90%, so we have a lot of catchup to do…So what we have to do is continue to grow and grow… It’s going to take 20-30 years to get to 90% of charter kids….And if we succeed over the next 20 or 30 years, that will be one of the fastest rates of change ever seen around the world for a large system, it’s hard. [applause]

Actually, all charter schools don’t have stable governance and all of them aren’t getting better every year (plenty close because of their lousy governance) and even charter advocates have called for changes to improve governance structures. What Hastings is suggesting is that democratic elections themselves create unacceptable instability in governance of public education.

Note that Hastings has invested millions in Rocketship charger schools, and while they claim to to be a not for profit, stoprocketship.com does provide numerous links that seem to indicate that much of their activities are structured so as to provide profits for its principals and those who make contributions.

No wonder Reed Hastings thinks that voters are annoying.  It makes the grifting too hard.

Note that this is not limited to education, where charter schools do not (when comparing apples to apples) outperform the public school system, and where in the extreme case (New Orleans 90% charters) we are seeing increasing cases of malfeasance and misfeasance requiring greater oversight.

It also applies to things like trade deals, or the Simpson-Bowles commission.

Even if this actually resulted in good policy, it would be wrong, but when you look at things like NAFTA, CAFTA, TPP, TTIP, etc., it is clear that all it does is that it creates an orgy of corruption and rent seeking.

When you decide to take democracy out of the mix, and run this stuff “like a business”, someone gets the profit, and ain’t the taxpayer.

Why Do I See the NSA Behind This Sh%$?

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The Internet Engineering Task Force has proposed a way to speed up encrypted connections that works by removing the encryption for part of the journey. Rather unsurprisingly it looks like a way allow the NSA, FBI, etc. to crawl up your ass into your encrypted data:

A draft put forward at the Internet Engineering Task Force has drawn the ire of prominent privacy activist Lauren Weinstein as “one of the most alarming Internet proposals” he’s ever seen.

The document that’s upset Weinstein is this one, out of the HTTPBis Working Group and posted as an Internet Draft on 14 February 2014.

 Entitled Explicit Trusted Proxy in HTTP/2.0, the standard proposes a mechanism by which an upstream provider – say an ISP – could get permission to snoop on decrypt user traffic for the purposes of caching.

 Using proxies to cache traffic in the service provider network is unremarkable and uncontroversial: it’s been normal practice for a long time. The end user benefit is better performance; the service provider benefit is a reduction in traffic over their upstream transit network links.

 From that point of view, encryption is a pain in the neck: the service provider can’t see into the encrypted traffic, which reduces the effectiveness of its caching strategy.

 The Internet Draft has this to say:

“To distinguish between an HTTP2 connection meant to transport “https” URIs resources and an HTTP2 connection meant to transport “http” URIs resource, the draft proposes to ‘register a new value in the Application Layer Protocol negotiation (ALPN) Protocol IDs registry specific to signal the usage of HTTP2 to transport “http” URIs resources: h2clr.’”

In essence, to try and protect their ability to cache, the authors of the standard propose that providers seek their customers’ permission to decrypt their traffic (solely for the purposes of offering a better customer experience, naturally).

 For some reason, Weinstein finds this proposal outrageous: “The proposal expects Internet users to provide ‘informed consent’ that they ‘trust’ intermediate sites (e.g. Verizon, AT&T, etc.) to decode their encrypted data, process it in some manner for ‘presumably’ innocent purposes, re-encrypt it, then pass the re-encrypted data along to its original destination,” he writes.

Considering that AT&T proposed this, and that AT&T’s record vis a vis illegal surveillance is pretty horrific, I do not see this as a positive proposal.

Would You Let the Vampire Squid Get a Hold of Your Dong?

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It appears that the coalition in Denmark has collapsed over this issue:

After a recent spate of controversies and ministerial resignations, the Danish centre-left government suffered another blow on Thursday when the Socialist People’s party (SF) left the ruling coalition amid anger over Goldman Sachs‘s investment in Denmark’s state-owned energy company.

 Goldman’s 8bn kroner (£900m) purchase of a 19% share in Dong Energy has been championed by the government but caused a revolt among SF’s parliamentary group. After a night of tension and discussions, SF’s leader, Annette Vilhelmsen, announced her resignation and said her party was leaving the coalition.

 “It has been a dramatic 24 hours,” Vilhelmsen said. “Yesterday it became clear to me that it wasn’t possible to unite the party. For the sake of SF, I take the consequence of this.”

 The Goldman Sachs deal was approved by the parliament’s finance committee on Thursday, but it has come under widespread scrutiny and criticism in recent weeks. A poll showed 68% of Danes were against the sale, and close to 200,000 people signed an online petition opposing the deal.

(emphasis mine)

Even worse, like most privatization deals, it is a hand out from taxpayers to overpaid CEOs:

My friend Niels-Jakob Harbo Hansen and I calculated some of the financial aspects of the deal, and they don’t look that good. The bidders are offering about 107.25 kroner per share, supposedly valuing the company at 31.5 billion kroner before the investment. In addition to a healthy package of minority rights, they also get a put option for 60% of the shares: if DONG doesn’t go public within 4 years or so (and Goldman can veto that), the investors can sell 60% of their shares at a strike price equal to the purchase price of 107.25 kr per share, plus a healthy return of about 3% per year.

 That’s like an insurance policy that covers not only your loss, but also the insurance premium you originally paid, plus interest.

 Once you account for the put option, the deal values the shares at 24.5 billion kr., around 47% of book value. Maybe that’s fair because DONG just had a big loss and will be constrained by its business plan to invest in windmills and such, but it still seems awfully low. On the other hand, the investment bankers have deemed it Fair™, so who am I to question that.

 The main thing we did was to compare the deal to the most obvious alternative: the Danish government (AAA rating, 26% debt/GDP, 45% including local government) could borrow at an interest rate of about 1%, and make the investment itself. The expected loss from the deal compared to a government investment is about 2.5 billion kroner.

So, it costs the taxpayer 3x as much as a public investment, and you can be certain that rates will go up faster than they would if the company were to remain completely publicly owned.

A Couple of Important Education Stories from New York State

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I would note that the New York Daily News has looked at administrator salaries, and discovered that executives at 16 charter schools in the city are payed more than the New York City school chancellor.

Like I said, looterz want to loot.

More significant is that the Southold School District Superintendent on Long Island has demanded that all student data be removed from Bill Gates’ latest attempt to monetize our children:

After finding out that student data is being shared through the New York State Department of Education Department with a private third-party vendor, Southold School District Superintendent David Gamberg has formally requested to have its students’ data removed from the controversial software system, citing privacy concerns.

 Newsday has reported that although student data is currently kept on state computer systems, New York is moving toward contracting with nonprofit Atlanta data company inBloom, Inc. to “store student test scores, disciplinary records, disabilities and other vital subjects.”

 Mr. Gamberg fired off a letter to inBloom CEO Iwan Streichenberger on Monday, requesting to “opt-out” from its data storing system, known as the Shared Learning Infrastructure. He has found a clause in the contract that allows districts to request their records be removed from the system, according to Mr. Gamberg’s letter.

 “It is our position that this data contains sensitive and highly personal student information that we prefer not be subjected to the potential for breach, unintentional distribution, access, or abuse without parental consent.,” Mr. Gamberg wrote.

Gee, you think?

I figured out that it was evil when I heard Bill Gates.

Attention Greece: You Now Have the Chance to Screw the Germans, Do IT!

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I was listening to NPR this morning, and discovered that the privatization/fire sale of Greek owned state assets that the IMF and the EU (really, the Germans) is not going as as quickly as expected, and one of the reasons is that some of the privatization deals actually effect the Germans and the rest as well, and they are objecting:

European governments, as well as Washington, are reportedly concerned over Russia’s possible expansion into Europe. Gazprom, Russia’s state-owned gas monopoly, has made a high bid for the Greek gas utility company. Media reports suggest the privatization agency has delayed choosing a buyer — under international pressure.

 There are also other strategic concerns, such as conflict with China over Greek ports.

 George Stathakis, an economist and lawmaker for the opposition leftist party Syriza, says China wants to expand its current control of a part of the Port of Piraeus and also buy the south-north railway link, raising fears China will flood the European markets with its inexpensive products.

 “German and Dutch interests are opposing the idea of using Greece as the primary source of Chinese trade with Europe,” Stathakis says.

(emphasis mine)

It’s not like the cheap Chinese crap will put Greek manufacturers out of business.  The Germans and the Dutch already did that.

Someone Greek will unload the ships, and someone Greek will fuel the ships, and someone Greek will operate the locomotives.

If some Germans lose their jobs over this, why should Greeks care?

Sauce for the gander.  The EU austerity caucus, with the Germans at the lead, had demanded, and got the dismantlement of the Greek public health insurance system.

Share the misery.

Another Inspector Renault Moment

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I’m shocked, shocked to find that gambling is going on here!

So, now that we are looking into the corruption and cronyism in Mubarak’s Egypt, and it turns out that it has its roots in the American led privatization of the Egyptian economy, just like the rampant corruption in post-Soviet Russia:

Beginning two decades ago, the United States government bankrolled an Egyptian think tank dedicated to economic reform. A different outcome is only now becoming visible in the fallout from Egypt’s Arab Spring.

Formed with a $10 million endowment from the U.S. Agency for International Development, the Egyptian Center for Economic Studies gathered captains of industry in a small circle — with the president’s son Gamal Mubarak at the center. Over time, members of the group would assume top roles in Egypt’s ruling party and government.

Today, Gamal Mubarak and four of those think tank members are in jail, charged with squandering public funds in the sale of public resources, lands and government-run companies as part of a dramatic restructuring. Some have fled the country, pilloried amid the public outrage over insider deals and corruption that toppled President Hosni Mubarak.

“It became a crony capitalism,” Magda Kandil, the think tank’s new executive director, said of the privatization program advocated by its founders. Because of the corruption, the center now estimates, the assets that Egypt has sold off since 1991 have netted only about $10 billion, $90 billion less than their estimated worth.

The privatization saga is a cautionary tale about the power and perils of U.S. foreign aid — most notably the nearly $8 billion that the United States has provided to Egypt since the 1990s to push the country toward economic reforms.

This is not a bug, it’s a feature. This sort of economic liberalization is all about creating a few corrupt individuals, because it’s cheaper to allow cronies to get siphon off a billion or two while our banksters steal the rest than it is to allow those resources to accrue legally to the workers and the country.

I may seem cynical about this, but the corruption in Egypt, or Russia, or pretty much all of other privatization schemes outside of the Scandinavian countries run this way, so I’ve come to the conclusion that this is the actual goal of these policies.

IMFed

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Yes, going through a debt crisis means selling off state assets at pennies on the dollar, so that private operators can underfund basic maintenance and overcharge consumers for luxuries like, you know, water:

Greece on Wednesday outlined plans to sell stakes in state-owned railway, water and real estate companies as part of a drive to raise billions of euros to help restore its ailing public finances.

…………

The European Union/International Monetary Fund bailout for the heavily indebted country projects revenue of 1 billion euros ($1.22 billion) per year from privatizations for the 2011-13 period.

…………

As part of the plan, the cash-strapped government will sell 49 percent of loss-making railway company OSE, 39 percent of Hellenic Post, 23 percent of Thessaloniki water EYATH and 10 percent in Athens water EYDAP.

I hope you are ready for the riots when people’s water bills triple overnight.

It’s sh%$ like this makes things worse.

The method is: sell the assets at an undervalued price, remove the revenue stream from your control, and they tell you that net result will be financial stability.

No, it’s just a slope to bankruptcy and the destruction of the middle class, and it is why the IMF is so justifiably despised across the world.

A Good Start

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Click for full size

H/t War is Boring

How do you know if a government policy is disastrous?

Well, there are any number of indicators, but the one that has a 100% record on predicting f%$#ed up policy is if it’s Dick Cheney’s idea.

Well, one of his ideas, back when he was Secretary of Defense was that “non core” military functions, like cargo transport, feeding the troops, and maintenance, should be outsourced to the private sector.

We all know how well that works. It’s so bad that even the US Air Force, the poster child for letting contractors run wild, is bringing its sustainment activities in house: (paid subscription required)

The U.S. Air Force is beginning to reclaim government management over upkeep of its large fighter, transport and, eventually, unmanned aircraft fleets, a move that could stunt efforts from companies looking to reap high profits from the maintenance business.

The Air Force is moving away from the contractor logistics support arrangements , popular in the 1990s, in which the government paid a premium for industry to handle product support duties, including oversight of touch labor and supply-chain management. During this post-Cold War period, the Pentagon downsized the workforce equipped with these skills in hopes that industry could oversee these tasks at lower costs and more efficiently. However, under Defense Secretary Robert Gates, this trend is reversing, and the government is now insourcing jobs in acquisition and sustainment; top Air Force officials say they expect savings.

If the policy has proved to be a disaster of such epic proportions that even the boyz from Colorado Springs* have decided that the possibility of plush jobs after they retire as generals cannot excuse it, then you just know that Cheney was part of the original decision.

Of course, the private contractors maintain that they will be cheaper (they aren’t), and that the government will find it tough to attract talent (Nope, once you take this in house, you get the people who previously worked for the government, then went to work for LockMartBoeinThrup, but have now been laid off), but mostly, they are screaming that they want their money.

Sorry, but you had your chance, and you f%$#ed it up. You’re fired.

*I mean the USAF, not Focus on the Family, though sometimes it is hard to tell them apart.

This is Not About Oil Production, It Is About Privitization

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I was wondering how long it would take, but the PAN and its ilk have been salivating at the possibility of privatizing Mexico’s state owned oil industry for decades, and now they are trying to make public theft of state assets a reality.

State ownership of the oil industry is a core value of the Mexcan body politic, so much so that there is a national holiday to commemorate the nationalization of the industry. It is considered to be a pillar of national sovreignty.

The reason that PAN loves the idea of privatization is because it will provide the opportunity to generate huge salaries and consulting commissions to the pale skinned Mexican elites who went to university at places like Harvard and Brown.

The facts are simple:

  • Mexican oil production is dropping.
  • Mexican oil revenues are at an all time high because of high oil prices.
  • It cost nothing to leave unexplored oil where it is right now.
  • There is no need to rely on big oil for the technical expertise to get at that oil.

When the Oil industry downsized and consolidated in the 1980s and 1990s, thousands of petroleum engineers and the like were without jobs, and many of them found positions with the oil services industry, which now arguably more technically capable than the big oil.

If they want these fields developed, the Mexican government could contract with companies with Halliburton and Slumberger*, and get the job done without signing over future earnings. What’s more they would get more local employment out of it, because big oil tends to employ lots of expats to get the job done.

The claims that Pemex “lacks the money and expertise” to get this done are driven by a desire among Mexican conservatives to sell $100 of oil for $1 today, because them and theirs will get an additional 50¢ in sweetheart deals.

Pemex does have problems, but these can be fixed.

*Full disclosure, one of my step mom’s life long friends is one of those Slumbergers.

Private Players in Most State Lotteries Corrupt and Inefficient

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Given the history of private tax collection, you can go to Paul Krugman’s blog post regarding the return of this activity, it is no of a surprise that the operation of most state lotteries greatly resembles the “Tax Farming” that bankrupted and caused the overthrow of the French monarchy.

It turns out that morally dubious is the most charitable description of how these companies operate, and when one takes the long view, they cost the states money when they operate a lottery.

While a state with an active lottery cannot switch immediately, it would benefit everyone by the lottery oligopoly, Gtech and Scientific Games, to take these functions internal to the state government, where there is far greater transparency.

I have not followed the lottery in Maryland, but it is clear that bribery, or something akin to bribery, has been going on in Texas for years.

Dodd to Filibuster

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Well, it looks like Reid will ignore Dodd’s hold, so the distinguished gentleman from Connecticut is promising an honest to God filibuster if Reid ignores the hold.

Go to the Act Blue box on the right hand side of the blog, and show him some love.

Note that the Act Blue Box is not an endorsement, just a note that I’m inclined towards them, hence multiple candidates for the same office are listes.

BTW, here is the Doddster on video talking about the filibuster:

George Bush: Objectively Pro Crime

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George bush wants to chop more than $1.5 billion from the COPS program and other policing initiatives.

That’s what, like 46 hours of Iraq?

But safe streets, competent and well equipped police officers, locating missing children, rehabilitation programs, that’s bad, because it’s the “evil gummint”.

If George Bush had his way, there would be no public peace officers or firefighters. His model of a society is Blackwater in Iraq.

CIA Plans Cutbacks, Limits on Contractor Staffing – washingtonpost.com

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This is what happens when you people think that the only legitimate role of government is to get money to your friends.

If you want something to be “privatized” then it should not get government money. Otherwise, it’s just graft.

CIA Plans Cutbacks, Limits on Contractor Staffing – washingtonpost.com

By Walter Pincus and Stephen Barr
Washington Post Staff Writers
Monday, June 11, 2007; A02

Acting under pressure from Congress, the CIA has decided to trim its contractor staffing by 10 percent. It is the agency’s first effort since the Sept. 11, 2001, attacks to curb what critics have decried as the growing privatization of U.S. intelligence work, a circumstance that has sharply boosted some personnel costs.

Contractors currently make up about one-third of the CIA workforce, but CIA Director Michael V. Hayden has said that their work has not been efficiently managed. Associate Deputy Director Michael Morell said in an interview that he does not think the CIA has become a revolving door, but ‘Director Hayden has said we don’t want to become the farm team for contractors.’

Morell said reviews are underway ‘to identify which of our jobs here at CIA should be done by staff and which of our jobs should be done by contractors or a ‘mix’ of contractors and staff.’ Effective June 1, the agency also began to bar contracting firms from hiring former CIA employees and then offering the employees’ services to the CIA within the first year and a half of their retirement from the agency — a practice known as ‘bidding back.’

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