June 22, 2015

Doing More, Not Less, to Save Retirees From Financial Ruin. . . At a conference hosted by the International Monetary Fund, Brad Delong, an economist at the University of California, Berkeley, argued that private markets were ill suited to handle the sort of long-term assessments needed to ensure a decent retirement. “The 21st century will see longer life expectancy, and thus a greater role for pensions,” he wrote. “Yet here in the United States the privatization of pensions via 401(k)’s has been an equally great disaster.” Rather than shrink Social Security, some experts and liberal politicians like Elizabeth Warren of Massachusetts and the Democratic presidential candidate Bernie Sanders propose expanding it. Today, more than half of working households do not have enough assets to avoid a drop in consumption in retirement, according to analyses by Alicia H. Munnell from Boston College and her colleagues. The proportion of households in that group has increased by 10 percentage points in just the last 10 years. New York Times

Clinton opposes VA privatization but sees need for choice. . . “We have learned that privatization and outsourcing is not a magic solution for anything, let alone when it comes to the unique obligations we have to our vets, so I do oppose blanket privatization proposals,” she said. Even so, the former secretary of state suggested there was a role for private health care in some areas of veterans’ treatment. “I do believe choice should be part of the solution and if we let the VA work more with communities while preserving what it does best, serving veterans and their unique needs, perhaps we can get better care faster to more vets.” Reuters

Our Ayn Randian Dystopia: The Five-Step Process to Privatize Everything. Law enforcement, education, health care, water management, government itself — all have been or are being privatized. People with money get the best of each service. At the heart of privatization is a disdain for government and a distrust of society, and a mindless individualism that leaves little room for cooperation. Adherents of privatization demand ‘freedom’ unless they need the government to intervene on their behalf.    United Steelworkers

Senate kills attempt to test privatization of commissaries. The Senate voted Wednesday to kill a plan hatched by its armed services committee to privatize five large commissary stores to test the concept of commercial grocers running base stores to save defense dollars. Colorado Springs Gazette

Is the US Government About to Privatize Air-Traffic Control? The future of air-traffic control in the U.S. could be in store for major reform. Under a policy proposed by Rep. Bill Shuster of Pennsylvania, the air-traffic control program would be removed from the FAA and spun off into a private not-for-profit corporation. . . .Shuster, who serves as chairman of the House Transportation and Infrastructure Committee, says the move would save taxpayers billions every year and provide a better level of service to flyers in the U.S. FlyerTalk

IL: FBI probing bribery over contract to supply privatized parking meters. The FBI is investigating whether an executive at the firm that manages Chicago’s privatized parking meters was paid $90,000 in bribes to steer a contract to install and maintain the controversial meters across the city. The alleged kickback scheme was laid out in an FBI search warrant affidavit filed in February seeking access to two email accounts tied to the vice president of government services at LAZ Parking, the Atlanta-based firm hired by a Morgan Stanley-led business consortium in 2008 to manage the privatized meters in Chicago. Chicago Tribune

MI: Reps: Study more before outsourcing state jobs. State agencies would have to prove the benefits of privatization and state workers could bid on their jobs before they’re outsourced under a bipartisan package bills in the state House. Two Democrats and two Republicans have introduced bills they said would allow outsourcing to happen “in the sunshine” and remove political influence from privatization decisions. The state’s problem-plagued prison food contract with Aramark Correctional Services and road contractors failing to live up to warranties are the types of snafus the legislation might prevent, backers said. Lansing State Journal

IN: Lessons of privatization taught anew – Opinion. When the state lottery commission initially released bids for operation of the Hoosier Lottery in 2012, the documents were so heavily redacted they were incomprehensible. Officials claimed the methods bidders described to hit lofty sales targets couldn’t be disclosed because they were trade secrets. Three years after a deal was signed with GTECH, it’s clear the methods also were implausible. The lottery commission voted this month to restructure the contract, dramatically reducing those lofty goals and, ironically, reducing the penalty risk for a company selling Hoosiers games of chance. If the Rhode Island-based company didn’t deliver on its revenue promises, it at least delivered another lesson on privatization: Be wary of outlandish claims. Indiana still needs that lesson.   Fort Wayne Journal Gazette

LA: New troubles erupt in LSU Shreveport hospital privatization. LSU leaders and the manager of the university system’s Shreveport hospital are again at odds, and the threat of a possible breach of contract lawsuit emerged Thursday in the privatization deal. . . . The contracts, according to University Health, would have LSU doctors working at Willis-Knighton Health System clinics to provide specialty care. David Ettinger, an antitrust lawyer hired by University Health, said if LSU doctors shift much of their specialty care to Willis-Knighton, that will drive insured patients away from the state-owned facility and will boost state costs for uninsured care. “It will be very harmful to patients. It will be very harmful to the taxpayers of Louisiana,” Ettinger said. NOLA.com

TX: Opinion: Have toll roads become ‘Troll Roads’? At one time free marketers spoke of toll roads as if they would be the answer to congested roads and urban gridlock. No longer. The thinking was that government doesn’t seem to do anything very well, and that included building and maintaining the roads. . . . But that thinking seems to be changing, at least in Texas. Companies that build and operate toll roads have proposed a number of new ones and the public seems to be pushing back. YourHouston.com