Saturday, September 17, 2011

Privatization: Turning America into K-Mart

Privatization: The Concise Encyclopedia of Economics | Library of Economics and Liberty:
DON'T SELL OUT AMERICA



Driven by wrong-minded public officials and corporate greed, contracts for public services are doled out without regard to cost effectiveness or quality. Time and time again, the public pays more and gets lower quality of services while public workers are laid off and corruption scandals make the news.

What is Privatization?


Privatization” is an umbrella term covering several distinct types of transactions. Broadly speaking, it means the shift of some or all of the responsibility for a function from government to the private sector. The term has most commonly been applied to the divestiture, by sale or long-term lease, of a state-owned enterprise to private investors. But another major form of privatization is the granting of a long-term franchise or concession under which the private sector finances, builds, and operates a major infrastructure project. A third type of privatization involves government selecting a private entity to deliver a public service that had previously been produced in-house by public employees. This form of privatization is increasingly called outsourcing. (Other forms of privatization, not discussed here, include service shedding, vouchers, and joint ventures.)

Regardless of the mode of privatization, the common motivation for engaging in all three types is to substitute more efficient business operations for what are seen as less efficient, bureaucratic, and often politicized operations in the public sector. Some have described the key difference as the substitution of competition for monopoly, though some forms of privatization may involve only one provider in a given geographic area for a specific period of time. But because government almost always operates as a monopoly provider, the decision to privatize usually means demonopolization, even if not always robust, free-market competition.
The decision to privatize usually involves money. Governments sell state-owned enterprises to obtain proceeds either for short-term budget balancing or to pay down debt. They turn to the private sector to finance and develop a major bridge or seaport when their own resources are stretched too thin. And they outsource services in the hope of saving money in their operating budgets, either to balance those budgets or to spend more on other services (and occasionally to permit tax reductions).

Fighting Privatization Resources

CHARTER SCHOOL SCANDALS WEBSITE



CHARTER SCHOOL SCANDALS

A compilation of news articles about charter schools which have been charged with, or are highly suspected of, tampering with admissions, grades, attendance and testing; misuse of funds and embezzlement; engaging in nepotism and conflicts of interest; engaging in complicated and shady real estate deals; and/or have been engaging in other questionable, unethical, borderline-legal, or illegal activities. This is also a record of charter school instability and other unsavory tidbits.
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