It has been a long-held belief among the right-wing populace that the federal government is “too large,” that government workers are inferior to private workers, and that private industry always does things better than the government.
So there has been a continuing effort to move responsibility from the federal government to the states, and from there to the private sector.
Any time a difficult social problem is discussed, the right wing inevitably suggests/demands, that the solution be left to the states: Abortion, gun control, immigration, gay marriage, drug control, flag burning, segregation . . . ah, the list goes on and on.
The fundamental reason is that the state and local governments are infinitely more dishonest and controllable (by wealthy crooks) than is the federal government.
Yes, there are plenty of dishonest people in the federal government, especially in Congress, but their actions tend to be more closely watched by the media, and thus more exposed.
I doubt any federal government in history has been as outright dishonest as the government of my state (Illinois), or of my county (Cook), or of my city (Chicago). If you’re not familiar with the term “Chicago politics,” you haven’t been paying attention.
And talk about bigotry, the states and cities always have been leaders.
It simply is much easier for a bigoted crook to control a state, county or city, than to control the whole country, and the bribe money is just as good. Political “bosses” thrive in smaller governments.
Any time, and I mean ANY time, you hear a politician opt for “states rights,” or “privatization,” know that he or she is a criminal, a bigot or both. No exceptions.
Which brings us to the title of this post . . .
Privatization is the great honeypot of politics. Crooked politicians love privatization because private industry (those folks who are “better” at everything than government workers) pay politicians big dollars to get their greedy hands on public works.
Two years ago, we published, “Presenting!! The Great Privatization Scam!” Please read it.
Any time the states (and counties and cities) engage a problem, the conversation seems to turn to privatization.
Chicago’s notorious Mayor Daley and his cronies stole so much, the city fell billions of dollars into debt. So the good mayor began selling parts of Chicago to private industry. He sold an expressway (Chicago Skyway) to private hands, and the tolls promptly doubled.
He sold Chicago’s parking meters and rates tripled, or more. He was planning to sell Chicago’s Midway Airport, but thankfully he retired (to a highly paid, non-job, at a connected law firm) just ahead of the Feds, looking into his finances.
So while the citizens pay more for services, and the same citizens will pay more taxes in the future (because no parking or toll money will come in) the private investors will laugh and pat each other on the back for the great deals they have made.
No suddenly, for “no apparent reason,” the TSA is unable to handle crowds at airports.
Sure, there often have been lines at security, but nothing like this. Two-hour waits have become common and even some three-hour waits. How could this happen?
Well, it didn’t just happen. It was caused. And the clue is in the sudden demand for privatization of airport security.
The formula is this: Cause a crisis. Declare the solution is to get rid of those lazy, stupid unmotivated government workers, and bring in those energetic, bright, private workers.
Never mind that they are the same workers.
Never mind that there is zero evidence that replacing federal workers with private workers will solve the problem (i.e. too few workers).
The goal is to get those delicious security dollars into private, greedy hands — hands that will shovel some of those dollars back into greedy politicians hands.
Saggeringly long lines at the nation’s airports this spring have led officials in Chicago, New York City, Atlanta and Seattle to discuss turning security over to private contractors, instead of employees of the Transportation Security Administration.
“It seems to me that it’s broken now and it can’t get much worse,” Ald. Edward Burke, 14th, one of a group of aldermen urging the city to give TSA officers the boot, said in an interview. “Why not give private security a chance?”
Alderman Burke is a long-time Chicago alderman, and therefore, a crook. As infamous Illinois politician, Paul Powell said, “I can smell the meat a’cookin'”.
Alderman Burke can smell the meat a’cookin.’
So sure, give private industry “a chance.” Which company? No one knows, but you can bet it will be a politically connected, generous-to-politicians company.
And a few years after this company is found to be worse than what we have now, the federal government will be forced to take over, again. (Think of the disaster that came from privatizing jails.)
So the real question is: “How did TSA get so much more awful this year?”
No mystery: NOT ENOUGH SCREENERS.
Remember the formula? Cause a crisis. Declare the solution is privatization.
Well, the best way to cause a crisis is to cut budgets, because the federal government “can’t afford” . . . [You name it: Social Security, Medicare, Medicaid, good roads, safe bridges, food inspection, drug inspection and on, and on and on]
President Bush II wanted to privatize Social Security — put into the hands of Wall Street. Can you guess why? Can you guess why the right wing, the handmaidens of the rich, always wants to cut federal budgets?
The answer: Privatization. Giving more money to the rich.
Reality: The federal government, being Monetarily Sovereign, can afford anything, and no, that won’t cause inflation.
Keep in mind the Big Lie: “Federal taxes fund federal spending.” It hasn’t been true since August 15, 1971, and it isn’t true today.
Travel group protests TSA staff cuts
The U.S. Travel Association is protesting staff cuts that are being planned by the Transportation Security Administration (TSA).
The appropriations bill that is being considered by lawmakers for the Homeland Security Administration, which oversees the TSA, would cap the agency’s employment at 45,000, which the Travel Association said Friday would result in a cut of about 600 workers.
Critics have often complained about the size of TSA’s workforce, but Dow said Friday that it is vital to the travel industry to have effective airport security.
You know those guys in Washington who tell you the federal deficit is “unsustainable” and who want a “balanced budget”? Think about them the next time you’re standing in a two-hour line at the airport.
And no, privatization won’t help. Not one bit. In fact, it will hurt, because private companies are even more devoted to cost-cutting than is the federal government.
Alderman Burke, and politicians all over the country, can smell the meat a’cookin’.
Rodger Malcolm Mitchell
Ten Steps to Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich afford better health care than the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE AN ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:
Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012
Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONEFive reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefiting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-tranferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.)
Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and corporate taxes would be an good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.
The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.
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
THE RECESSION CLOCK
Recessions begin an average of 2 years after the blue line first dips below zero. A common phenomenon is for the line briefly to dip below zero, then rise above zero, before falling dramatically below zero. There was a brief dip below zero in 2015, followed by another dip – the familiar pre-recession pattern.
Recessions are cured by a rising red line.
Vertical gray bars mark recessions.
As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.
•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.
•The more federal budgets are cut and taxes increased, the weaker an economy becomes..
•No nation can tax itself into prosperity, nor grow without money growth.
•Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
•A growing economy requires a growing supply of money (GDP = Federal Spending + Non-federal Spending + Net Exports)
•Deficit spending grows the supply of money
•The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
•The limit to non-federal deficit spending is the ability to borrow.
•Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
•The single most important problem in economics is the Gap between rich and the rest..
•Austerity is the government’s method for widening the Gap between rich and poor.
•Until the 99% understand the need for federal deficits, the upper 1% will rule.
•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..
9 thoughts on “TSA and the great privatization scam: Part II”
So private industry failed, because they work on a profit motive. And the TSA failed because they are government.
The “solution”: Put it in the hands of private industry.
And that is how the rich run our nation.
Whatever is privatized becomes subject to the profit motive, which means offering the lowest possible quality at the highest possible price.
This is why privatization always results in higher costs for state, county, and municipal taxpayers. With privatization, your local tax dollars go to the new owner, who continually increases his prices while decreasing his service. If you question this theft, you are dismissed as a “socialist.”
Meanwhile local government, in order to pay the owner’s fees, must cut funding for remaining departments have not (yet) been privatized.
And yes, privatization is usually preceded by an engineered “crisis.” Politicians are bribed to cripple a government operation by cutting its funding (in this case the TSA) until the masses not only submit to privatization; they beg for it, and regard it as a “win.” U.S. Senator Mark Kirk (R-Ill) has called for TSA Administrator Peter Neffenger to resign and allow privatization if he can’t fix the staffing shortages by Memorial Day. However Kirk will not allocate the money to do it.
And the masses cheer. “Go Senator Kirk!”
The push to privatize the TSA began in 2012 when the House Appropriations Committee began cutting the TSA’s budget. Each year since then, the cuts have been bigger ad bigger.
Republicans such as Rep. John Mica (R-Fla.) admit that they are squeezing the TSA in order to replace it with private contractors (who will bribe Mr. Mica and other politicians). Mica claims that privatization will result in shorter lines and “more efficiency” (which is the opposite of the truth).
The T.S.A. says that budget cuts have left the agency with 10 percent fewer screeners than it had in 2013. At the same time, the number of people flying is expected to increase by 12 percent this year, reaching a record.
Twenty-two airports already use private contractors to handle airport security. The push is to privatize all U.S. commercial airports (over 450 of them) that are profitable. The private owners will hire the minimum possible employees, pay the lowest possible wages, and treat workers like disposable cattle. The disgruntled workers, plus a high turnover rate, will cause airport lines to become longer and uglier than ever, while the owners collect the loot. This is called “efficiency.”
The core essence of neo-liberalism is privatization, in which a handful of people own everything, and the rest of us are their serfs. Therefore, contrary to popular belief, neo-liberalism is not “hyper-capitalism.” It is anti-capitalism.
The masses submit to all this because they have been trained to regard public ownership as “evil.” For example, which of the following two comments is most likely to stick in the average person’s mind?
COMMENT 1: “The long wait times are a direct result of Congress’s failure to give T.S.A. the money it needs to do its job.” ~ J. David Cox Sr., the president of the American Federation of Government Employees, which represents airline screeners.
COMMENT 2: “No, the problem is a huge government bureaucracy!” ~ Rep. John L. Mica, (R-FL) who wants privatization.
Rodger. Great article. For my “keeper” file on privatization”. Unrelated question:
You have noted : “Here’s a little secret. The federal government could pay off that so-called “debt” — those T-bills — tomorrow, the same way your bank pays off your savings account. The government merely could take the existing dollars in those Treasury accounts and transfer them to the checking accounts of T-bill holders. No new dollars needed.”
I understand this and I understand that the “National Debt” is just a savings account and thus it is no burden on the future. However, a thoughtful friend of mine pointed out to to me that “such a transaction just changes a Treasury liability to a Fed liability (reserves). So, in that sense, nothing has changed. from the perspective of a “consolidated government”. And, if the Fed wanted to reduce those excess reserves it would have to sell T-securities – so we’d be back to where we started”. He is,of course, pointing out that “paying off” T-securities will increase bank deposits and bank reserves – with the latter being a liability of the Fed (and interest is currently being paid on this liability). I didn’t know exactly how to address this point in the context of your important statement. Thus I would be appreciate as to any thoughts you might have as to how “Monetary Sovereignty” addresses this subtlety. Thanks.
” . . . if the Fed wanted to reduce those excess reserves it would have to sell T-securities.”
I’m not sure why there would be “excess” reserves.
Yes, if domestically owned T-securities were redeemed,domestic bank deposits would increase, requiring reserves to increase. But not “excess” reserves. And of course, many dollars would flow to foreign banks.
But all of that is beside the point, which is this: That mystical thing wrongly known as the federal “debt” would decrease, and all the debt-worriers would have nothing to talk about.
Think of it this way: Every U.S. dollar in existence, is a debt of the federal government. There is no U.S.. dollar anywhere that is not a U.S. debt.
What does the federal government owe on each dollar? Full faith and credit.
Unfortunately, T-securities are referred to as “debt,” and that is what people ignorant of federal financing wring their hands about. But T-securities represent only a fraction of U.S. debt.
How many U.S. dollars exist in the world? I’m talking about bank accounts, dollars in transit, loans — everything that can be called a dollar? I don’t know, but this I do know: Every one of them is federal debt.
In one sense, your friend is correct. Nothing changes — except the semantics.
If we somehow could teach the public, the politicians and the media to refer to T-securities properly as “deposits” or as “investments,” rather than as “debt,” the whole “debt problem” would disappear, instantly. (No one talks about a “deposits” or “investments problem.”)
Just think: No more “debt” clocks, or phony wailing about the “unsustainable debt.” (How can dollars be unsustainable?)
Look in your wallet. It contains paper titles to federal debt, which neither are more nor less “debt” than are T-bills.
In reality, if all federal debt were eliminated, no dollars would exist. That is the nature of Monetary Sovereignty.
Rodger thanks much for taking the time to respond to my question. I think I get it. That is, whether T-securities or reserves, etc., we are talking about assets of the private sector -all of which are federal debt in one form or another. The debt clock should be the savings clock, etc.
When I mentioned excess reserves I was referring to those reserves in excess of “required” reserves. I believe it is just these excess reserves upon which the Fed is paying interest.
All U.S. dollars are the debt of the federal government.
Other assets are not. Houses are not. Stocks are not. Cars are not.
Only U.S. money is federal debt, and that goes for all U.S. money: Bank accounts, dollar denominated loans, credit card debt denominated in dollars, etc.
Interest on reserves
Rodger thanks much for the link as well, of course, for your explanation. It was very helpful and now I get it. I even went back to your book “Free Money” for reinforcement. Since I now have had exposure to these ideas for a period of time, and thus I have a “framework”, it made for even more useful reading the second time around.