–Presenting!! The Great Privatization Scam!

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Mitchell’s laws:
●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor,
which ultimately leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The penalty for ignorance is slavery.
●Everything in economics devolves to motive,
and the motive is the gap.

As we all know, private industry does everything smarter, faster, better, more honestly and more efficiently, than does the federal government.

We know this because . . . well . . . because it is what we have been told. Repeatedly.

By whom? Let’s put on our Sherlock Holmes hats and follow the trail.

House Speaker John A. Boehner’s call to sue President Obama for overstepping the bounds of executive authority marks a stunning break for Republicans, who for years have tried to keep the courts out of the big questions of the day.

Analysts said the switch signals the continued ascendance of the libertarian wing of the Republican Party.

O.K., the first clue is that the Republican party, already dominated by the Tea Party, also is becoming more libertarian.

So what?

Annual Privatization Report 2014 Federal Government Privatization
By The Reason Foundation

The Business Coalition for Fair Competition, an alliance of associations, think tanks, corporations and individuals, released a list of its top 10 most egregious examples of unfair government competition with private enterprise for the year.

So, we’re not talking about doing things “smarter, faster, better, more honestly and more efficiently.” We’re talking about fairness.

Even if private industry were to do things dumber, slower, worse, more criminally and less efficiently, it simply wouldn’t be “fair” for those big federal government bullies to do the work.

Who says so? For one, the Reason Foundation.


Reason Foundation
Who is on Reason’s Board of Trustees?
David H. Koch, Koch Industries, New York, NY

Reason Foundation advances a free society by developing, applying, and promoting libertarian principles, including individual liberty, free markets, and the rule of law.

O.K., that tells us something. The Reason Foundation is a libertarian mouthpiece, partly funded by one of the richest industrialists in the world, David Koch.

And, who else says says private industry is better than government? That above-mentioned Business Coalition for Fair Competition.


Business Coalition for Fair Competition

The Business Coalition for Fair Competition (BCFC), (is) a coalition of trade associations, businesses, and organizations dedicated to free enterprise, relief from unfair government sponsored competition, and smaller, more efficient government.

“Smaller government.” Where have we heard that, before? Isn’t that part of the Tea Party’s mantra?

So now, we have the Republican Party, the Tea Party, the Libertarian Party and David Koch, all telling us that private industry work is better than federal government work.

And they are telling us the issue is not “smarter, faster, better, more honest or efficient; it’s fairness.

In 1980, the first White House Conference on Small Business made unfair competition one of its highest-ranked issues.

It said, “The Federal Government shall be required by statute to contract out to small business those supplies and services that the private sector can provide.

The government should not compete with the private sector by accomplishing these efforts with its own or non-profit personnel and facilities.”

In 1986, the second White House Conference made this one of its top three issues. It said, “Government at all levels has failed to protect small business from damaging levels of unfair competition.

And the 1995 White House Conference again made this a priority issue when its plank read, “Congress should enact legislation that would prohibit government agencies and tax exempt and anti-trust exempt organizations from engaging in commercial activities in direct competition with small businesses.

Notice something interesting, here? While they still fail to talk about doing better work, the fairness focus is on small business.

Think about it. The Republicans and David Koch worried about small business?? Gimme a break!

David Koch and his brother own that “small business,” Koch Industries, which in turn owns such “small businesses” as, Invista, Georgia-Pacific, Flint Hills Resources, Koch Pipeline, Koch Fertilizer, Koch Minerals and Matador Cattle Company.

According the the Koch Industries web site:

“Koch companies have a presence in about 60 countries and employ more than 100,000 people worldwide, with about 60,000 of those in the United States. They have invested approximately $65 billion in acquisitions and other capital expenditures since 2003.

“Koch companies are involved in refining, chemicals and biofuels; forest and consumer products; fertilizers; polymers and fibers; electronic components; process and pollution control equipment and technologies; commodity trading; minerals; energy; ranching; glass; and investments.”

To these guys, “small business” means a political bribe (er, ah, “contribution”) of less than $500,000. Don’t even begin to think these business Goliaths are at all concerned about “Bob’s Plumbing” or “Bill’s Landscaping.”

Here are some examples of “unfair” competition by the federal government, as presented by the Republican, Koch-sponsored, libertarian, Tea Partyesque, Reason Foundation:

The Department of Defense (DoD) operated 178 grocery stores
(domestic commissaries) with a $1.3 billion annual subsidy, as well as
60 movie theaters world-wide, costing $120,000 each.

The commissaries cost taxpayers nothing (because federal taxes do not fund federal initiatives. The two are unrelated.)

The commissaries sell food, clothing and hard goods to military families at below cost prices. If they were privatized, the need for profit would require prices to rise substantially, forcing military families to pay a great deal more for virtually everything.

How this would be an improvement for America, is not revealed.

Local and regional transit authorities, heavily subsidized by the Federal Transit Administration, engaged in competition and duplication with private sector motorcoach operators.

If these “local and regional transit authorities” were not “heavily subsidized,” transportation prices would rise, and less money would come into the local and regional areas. This is good??

Implementation of Obamacare empowered the government to hire Health Care “Navigators” in 2013 to engage in unfair government competition with private sector insurance brokers.

More concern about “unfair competition,” with no concern about prices, efficiency, etc. Nor is any explanation about why it is preferable for private workers, rather than public workers, to have jobs.

Some 850,000 federal employees are engaged in positions that are commercial in nature. Little is being done to privatize those positions, or even subject them and the functions in which they reside to any direct public-private cost comparison or evaluation.

Yes, the government employs those 850,000 people, paying them salaries and providing them with health-care benefits. So?

Most tellingly, the Republican, Koch, libertarian, Reason Foundation take both sides of the argument. They bemoan the lack of a “public-private cost comparison,” but also bemoan the government offering services at less cost to the public, as “unfair competition.”


To summarize federal privatization:

1. The upper .1% income group always wants privatization, because it puts money into their pockets. Despite the red herring of “competing with small business,” very little privatization goes to small businesses.

Privatization merely transfers business from one large competitor (the federal government) to another large competitor (the company receiving the contract).

2. The federal government is able to provide goods and services at less cost to the populace than can private industry, for two reasons: No profit motive and unlimited, free funding. (The federal government can invest billions into a project, without asking for any tax money).

3. The sole advantage of private industry comes from competitive initiative. Competition breeds effort.

4. However, privatization usually involves the transfer of government operations to one organization, which does not compete. Example:

Selling TVA: Obama budget says state, local stakeholders could buy government utility

In the White House budget plan for fiscal 2015 released Tuesday, the Office of Management and Budget suggests the federal government consider transferring or selling TVA to state and local governments, power cooperatives or energy companies in the Tennessee Valley, to help cut the federal debt associated with the government-owned utility.

“The administration continues to believe that reducing or eliminating the federal government’s role in programs such as TVA, which have achieved their original objectives, can help mitigate risk to taxpayers.

That last line came from the the administration of Barack Obama, the noted FICA-raising, Social Security-cutting, right-winger-in-left-winger-clothing.

The line is an example of the BIG LIE. The federal government, being Monetarily Sovereign, can invest infinite amounts of money into any project, and take any amount of losses, without charging taxpayers one cent. There is no risk to taxpayers.

But the local governments and private business are monetarily non-sovereign. They cannot absorb losses. So what will they do when given TVA? The local governments will raise taxes and prices, impoverishing taxpayers.

The power cooperatives or energy companies will cut services and raise prices, enriching their owners and impoverishing their customers.

As in almost all cases of federal privatization, the citizens and small businesses will be the losers, while the rich grow richer. And all this is done in the name of “fairness” and helping “small business.”

As one small step in understanding the federal government shell game, keep this immutable formula in mind: Federal sector privatization = private sector scam.

Rodger Malcolm Mitchell
Monetary Sovereignty

Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
9. Federal ownership of all banks (Click here)

10. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)


10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
Two key equations in economics:
1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports

Monetary Sovereignty Monetary Sovereignty

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the lines rise. Federal deficit growth is absolutely, positively necessary for economic growth. Period.


3 thoughts on “–Presenting!! The Great Privatization Scam!

  1. Privatize the TVA? Why not? The new owner will raise rates, cut services, and fire thousands of TVA employees across seven states, but at least the TVA will become more “efficient,” and the government will “profit” from the sale.

    [QUESTION: What if you could use your home computer to access your bank account, and type in whatever numbers you liked? Would you concern yourself with debt or savings or profits?]

    This push for privatization has been coming for a long time. In 1964, Republican presidential candidate Barry Goldwater ran on a platform that included privatizing the TVA.

    The TVA became a self-funding agency in 1959, and stopped receiving any federal funds in the 1980s. Meanwhile average Americans have become progressively poorer, while the controllers of the TVA have sold bonds whether they needed to or not. The result is that the TVA is (supposedly) $30 billion in debt. The US government could pay off this debt, but Obama says the debt means the TVA must be privatized. Congress imposed an arbitrary debt ceiling of $30 billion in 1979, and the TVA has now reached that limit. So the TVA must be put under the private control of only one interest.

    In turn, the new owner will use the debt as an excuse to quadruple the rates he charges for water and power. His 9 million victims will cheer as they are plunged into poverty, since privatization means “more efficiency” and “smaller government.” Moreover privatization will shrink the federal deficit and national debt (even though the TVA does not contribute one penny to the deficit or the “national debt”).

    Obama says the TVA must be reformed (i.e. privatized) because it has long since accomplished its original purposes of economic development and rural electrification. (Presumably the seven states served by the TVA no longer need electricity or development).

    The TVA has 12,893 full-time employees. All will be terminated (except for the most highly paid) and replaced with temp workers with no benefits. TVA is already cutting its staff in an effort to cut $500 million from the utility’s annual operating and maintenance spending.

    Many TVA functions will be outsourced to private contractors, whose exorbitant fees will be yet another excuse to quadruple TVA rates.

    Much of the population in eight southern states will be unable to afford having water and power in their homes.

    When the new owner cuts the TVA maintenance, the TVA’s dams will break, causing mass damage. The federal government (e.g. FEMA) will clean up the damage, and the owner will not be charged with any crime.

    But at least we will have “more efficiency” and “smaller government.”


  2. Old trick. Let the government set everything up then along comes private interest claiming it can do better. How long before NASA hands all their computers, technicians and scientists over to SpaceX?


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