Privatization

The Reason Foundation's New Annual Privatization Report

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The Reason Foundation, the nonprofit that publishes this website and magazine, came out today with its 22nd Annual Privatization Report, the most comprehensive report on privatization developments you'll find anywhere. From our press release:

"Democratic Gov. Ed Rendell recently accepted a $12.8 billion bid to lease the Pennsylvania Turnpike, in what would be the biggest toll road privatization deal in U.S. history," said Leonard Gilroy, director of government reform at Reason Foundation and author of the report. "Florida has undertaken over 150 outsourcing initiatives since 2005. Leaders of all political stripes recognize privatization is a proven policy tool that can help save money and balance budgets."

The Reason Foundation report singles out Chicago as a hotbed of local privatization under Democratic Mayor Richard Daley. Chicago leased the Skyway-a 7.8 mile toll road-for $1.8 billion in 2005 and four downtown parking garages for $563 million in 2006. Now Chicago is soliciting private sector bids for Midway Airport, its downtown parking meter system, and some recycling facilities.

You can read more about the report, and download the whole shebang, here.

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  1. “The Reason Foundation report singles out Chicago as a hotbed of local privatization under Democratic Mayor Richard Daley.”

    This is ironic considering that a recent issue of Reason Magazine lists Chicago as the least pro-freedom big city in the Untied States – even if it is now legal to eat foi gras.

  2. Color me nonplussed.

    Private ownership of govt-enforced monopolies is seldom any better than direct govt ownership. Indeed it’s often worse.

  3. wet blanky beat me to it

    Chicago has a long civic history of public/private sector partnerships that in no way suggest free markets and liberty.

    Ask Robert Poole when do they plan to start constructing those private underground freeways he recommended for down here in the ATL?

  4. Privatization without the introduction of competition to the market in question accomplishes nothing.

    For example, I’m sure private ownership won’t magically fill in all those decade-old potholes on the PennaTpk. It’s not like they’re going to lose market share to that other interstate highway between Cleveland and Philadelphia (hint: there isn’t one).

  5. I think that it would be great if Reason could point to model privitization legislation or initiatives. The form that privitization takes is as important as whether it happens.

    There should be more detailed discussion about how governments can get it right, e.g transparent bidding, multiple bidders, proper oversight and follow-up, and contracts that present good value for taxpayer money. If a consultant is in non-compliance, they should have to repay the government, just like they would any other customer.

    In Texas, the state recently hired Accenture to restructure Medicaid services. It turned into a fiasco. Over-budget, past schedule, and off target. The state has taken back some of the responsibilities because Accenture did (and continues to do) such a horrible job. And it still cost Texas a great deal of money.

    It is incredible that a private company that is well paid can do a worse (significantly worse) job that poorly paid government employees. I don’t think the problem was privitization, just that here it was done poorly, with Texas going into a contract that was too favorable to the vendor.

  6. Or Accenture just sucks.

  7. It’s not like they’re going to lose market share to that other interstate highway between Cleveland and Philadelphia (hint: there isn’t one).

    The highway isn’t the only way to get from Cleveland to Philly. The better the highway is, the more people will use it instead of hopping on Southwest.

    -jcr

  8. “I think that it would be great if Reason could point to model privitization legislation or initiatives. The form that privitization takes is as important as whether it happens.”

    See here:

    http://www.reason.tv/video/show/6.html

    -jcr

  9. Ask Robert Poole when do they plan to start constructing those private underground freeways he recommended for down here in the ATL?

    Good Lord. Where does Poole think the money will come from? Wait, don’t tell me – scrap the MARTA and melt down the light rail vehicles into scrap metal and use that as the down payment.

  10. I was back home (South Bend, Ind.) a month ago and all people could bitch about was the privatized toll road and how much more colossally f-ed up it is now compared to before. And it was plenty boondoggley before.

  11. Yay for privatization! *sarcasm off*

    We now have private prisons, red light cameras, and apparently, Blackwater employees are helping to raid medical marijuana dispensaries (the DEA denies this, but since when can we ever expect the government to be truthful?).

    Instead of tuting privatization, like to see Reason do a study on the perverse effects of it.

  12. Touting, rather. *ugh*

    I wish Hit & Run had an edit feature.

  13. Don’t expect the Pa. Turnpike to be privatized anytime soon. The benefits have been undersold; all the public is hearing are the fears – higher tolls, giveaway to greedy capitalists, etc. etc. We all know too well that if the shoe industry was a public enterprise for the last 150 years, how hard it would be to sell the shoe-buying public on privatization.

  14. Quote from MikeA: It is incredible that a private company that is well paid can do a worse (significantly worse) job that poorly paid government employees.

    When factoring total compensation and hell, even just on a cash basis, most any government job I’ve heard about is pretty well paid.

  15. MooreL,
    I live in South Bend as well. I think people here are complaining simply about the road being “privatized” rather than the fact that someone is actually working on it.

  16. John C Randolph,

    So your response is, if they don’t like the bread monopoly, let them eat cake.

    Flying is way more expensive by its very nature, and it’s not a viable option if you’re bringing a lot of items with you — or even if you’re just bringing a bike — or need to get around Philly when you get there. And it’s definitely not viable if your trip is from Youngstown to Reading.

  17. Chicago has a long civic history of public/private sector partnerships that in no way suggest free markets and liberty.

    Indeed. Such partnerships are usually a petri dish for corruption on a grand scale.

    Just how many millions were stuffed into well-connected pockets because of the Fannie/Freddie “partnership”?

  18. These faux-privatization schemes that are pushed by Reason are the reason why so many people view libertarians as nothing more than Republicans who smoke pot. Witness self-proclaimed libertarians preaching the virtues of “privatized” prisons; that is, the state granting the right to use force to corporations for private gain: http://www.reason.org/corrections/

  19. Lease? Lease? What the hell is this “lease” shit? That ain’t privatization, it’s old fashioned government chartering of monopolies. If you want to privatize something, sell the bugger off and walk away!

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