One percent’s twisted new heist: What’s really behind privatization
Outsourcing government not only leads to poor services -- it's killing the middle class, an expert tells Salon
Jamie Dimon, Donald Trump, David Koch (Credit: Reuters/Yuri Gripas/AP/Dan Hallman/Evan Agostini)
As most experts and layman enthusiasts will tell you, there’s no one, single explanation for the past 30-plus years of growing economic inequality. Its drivers are multiple and separating one from the other is often quite complicated. Low taxes on wealthy individuals and corporations, the gutting of labor unions, the increased mobility of capital, technological gains, overly protective intellectual property law; the list goes on.
In fact, here’s another one to add to the list: privatization. According to “Race to the Bottom: How Outsourcing Public Services Rewards Corporations and Punishes the Middle Class,” a new study from In the Public Interest, a think tank focused on how privatization affects the economy, the routine practice of outsourcing government functions is another important reason why the middle class is shrinking as those at the very top reap more and more of the fruits of our economy. To explain how that is — and why it’s important that people committed to economic justice push back against the practice — Salon recently spoke with ITPI research and policy director Shar Habibi. Our conversation is below and has been edited for length and clarity.
I think the general perception is that privatization/government outsourcing really kicked off under Reagan, so about 30 years ago. Is it still a problem today?
I think that 30-year time frame is correct in terms of when the idea really gained steam, but I would say, since the financial crisis in 2008, there have been a lot of cities and states that have had budget shortfalls and some financial stress, and private companies have been coming in and saying, “We can do this better, faster and cheaper; we can take over these services and run them for you.” Unfortunately, there’s really a growing body of evidence that these claims are untrue and that public services that have been outsourced are not running better, faster and cheaper. What our report specifically looks at is how government outsourcing degrades jobs and One percent’s twisted new heist: What’s really behind privatization - Salon.com: