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President Reagan may be best associated with privatization of government-run entities and programs, but it was President Clinton who implemented the idea through private contracting, outsourcing and limited government.
Now President Trump is poised to continue privatization and private contracting in all kinds of industries, from education to incarceration.
On the origins of privatization and how it became ubiquitous
Donald Cohen: "The idea came from a reaction by conservative ideological theorists and strategists in reaction to the New Deal, to the expansion of government services and the role of government in our society. They actually redefined what governments all over the country already did and that's lots of contracting for things. But they turned it into an ideological struggle, and what conservatives now come into government to do, to privatize or outsource services.
"If you look at some of the writings of folks from the Heritage Foundation and other sort of conservative think tanks in the '70s and '80s who wanted to reduce the role of government — they wanted the government to be, you know, you get what you pay for, and you don't pay for what you don't use. And so they created a political project that was intended, strategically — and they're very clear about this — to split constituencies, because most people actually liked government services and wanted government services. So they needed to split those constituencies that supported government programs from the question of who delivers those services."
On President Reagan and President Clinton's respective roles in launching privatization
DC: "[President Reagan] played a big role in the ideological push to privatize and outsource American public services. He actually didn't do that much implementation. He was up against a Democratic Congress. He signed the executive order, he pushed hard, but in the end, it really fell to President Clinton to implement.
"[Clinton] was a Democrat that came in in 1992, and, you know, his famous quote 'the era of big government is over,' which speaks to Reagan's sort of ideological influence, that the attack on government had succeeded and people didn't trust government anymore. But what Clinton did was actually make it happen. You know, he had asked Vice President [Al] Gore to lead a commission on reinventing government. And that's all well and good, you should always do better and you should always reinvent. But he did — two things came out of that were very important. First, Clinton told Gore, and made a decision in the administration, to reduce federal employment by 100,000 jobs. The problem with that is the work still needs to happen. People still count on the services, so the result is the beginning of a massive increase in the number of contractors.
"The second thing that came out of the Gore program and President Clinton's language was really about redefining who we are from citizens to consumers, where we were now customers of public services. We were no longer citizens with rights and responsibilities. And I can't overestimated the significance of that: redefining who we are and what we do as a nation as participants is really important. We aren't just consumers. It's in my interest for every child to be educated, for my interest for workers in another part of the country to not be poisoned on the job, and for there to be a middle class. It's in all of our interests, and those are things that governments do."
"President Trump's cabinet and appointees are really sort of a road map to privatize all sorts of things."Donald Cohen
On where we are seeing privatization today more than we've seen in the past in the U.S.
Shahrzad Habibi: "Really there's privatization and contracting going on in all sectors of government. Everything from education to health and human services to our physical infrastructure to our criminal justice system, our water systems. So, we're really seeing corporations seeing these public services and public assets as potential moneymakers. There's almost $2 trillion worth of contracts on the local, state and federal levels of government combined every year, and some of those contracts are done well and some of them are not. So last year, we looked at a sample of cities that had contracted out their trash collection, and some of them were done well. Some of them had strong language regarding things like the city's ability to manage the contract, to oversee and hold the contractor accountable. There were provisions that insured workforce stability. And those were the contracts that were more successful and allowed the city to be able to quickly correct problems when they cropped up."
On what to expect from President Trump regarding privatization
SH: "One area that we're concerned about is around prison privatization and privatization of immigration detention. There has been a lot of momentum in the Trump administration to increase the number of beds within the immigration detention system, and what that means is contracting out with for-profit companies. The two largest of companies are publicly-traded companies — GEO Group and CoreCivic. These are companies that have horrible track records. There was one prison in Idaho that was so violent that it became as 'the gladiator school.' And it was incredibly mismanaged and understaffed. And in the immigration detention facilities where there's children and families, there is documentation of psychologically damaging conditions, with children being subjected to harsh living conditions, inedible food, wrong dosages of medications and other horrific conditions."
DC: "President Trump's cabinet and appointees are really sort of a road map to privatize all sorts of things. They'd like to privatize Medicaid, and they're certainly trying to do that in the current health care bill, gives states the opportunities to do that. Education. You know, sort of across the board in every department — and I'm pretty convinced what will happen, from my research on the Clinton administration, and every other administration, is maybe it's Jared Kushner, but someone's gonna, they're gonna go to every department in the federal level and say, 'What can you outsource?'"
This segment aired on May 8, 2017.
- Report: How privatization increases inequality
- The History of Privatization: How an Ideological and Political Attack on Government Became a Corporate Grab for Gold
- The Private Prison Industry Is Making A Comeback
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