The New York Times recently published a series of articles about the dangers of privatizing public services, the first of which was called “When You Dial 911 and Wall Street Answers.” Over the years, the Times has published other exposés of privatized services, like hospitals, health care, prisons, ambulances, and preschools for children with disabilities. In some cities and states, even libraries and water have been privatized. No public service is immune from takeover by corporations that say they can provide comparable or better quality at a lower cost. The New York Times said that since the 2008 financial crisis, private equity firms “have increasingly taken over a wide array of civic and financial services that are central to American life.”
Privatization means that a public service is taken over by a for-profit business, whose highest goal is profit. Investors expect a profit when a business moves into a new venture. The new corporation operating the hospital or the prison or the fire department cuts costs by every means to increase profits. When possible it eliminates unions, raises prices to consumers (even charging homeowners for putting out fires), cuts workers’ benefits, expands working hours, and lays off veteran employees who earn the most. The consequences can be dangerous to ordinary citizens. Doctors in privatized hospitals may perform unnecessary surgeries to increase revenues or avoid treating patients whose care may be too expensive.
The Federal Bureau of Prisons recently concluded that privatized prisons were not as safe as those run by the bureau itself and were less likely to provide effective programs for education and job training to reduce recidivism. Consequently, the federal government has begun phasing out privately managed prisons, which hold about 15 percent of federal prisoners. That decision was based on an investigation by the Justice Department’s inspector general, who cited a May 2012 riot at a Mississippi correctional center in which a score of people were injured and a correctional officer was killed. Two hundred and fifty inmates participated in the riot to protest the poor quality of the food and medical care. Since the election, the stock price of for-profit prisons has soared.
There is an ongoing debate about whether the Veterans Administration should privatize health care for military veterans. Republicans have proposed privatizing Social Security and Medicare. President George W. Bush used to point to Chile as a model nation that had successfully privatized Social Security, but The New York Times recently reported that privatization of pensions in Chile was a disaster, leaving many older people impoverished.
For the past fifteen years, the nation’s public schools have been a prime target for privatization. Unbeknownst to the public, those who would privatize the public schools call themselves “reformers” to disguise their goal. Who could be opposed to “reform”? These days, those who call themselves “education reformers” are likely to be hedge fund managers, entrepreneurs, and billionaires, not educators. The “reform” movement loudly proclaims the failure of American public education and seeks to turn public dollars over to entrepreneurs, corporate chains, mom-and-pop operations, religious organizations, and almost anyone else who wants to open a school.