Private companies had as much to do with Flint's lead poisoning as Adam Smith had to do with the bread lines in the former Soviet Union. In fact, as I have noted before, Flint was a government-made disaster from top to bottom. Private companies didn't run the system or profit from it. Government officials switched Flint from the Detroit Water and Sewage Department (a government-owned-and-operated system) to the more—not less—expensive Karegnondi Water Authority (another government-owned-and-operated system). Why? Because it would create union jobs and boost the local economy. This wasn't an austerity cost-cutting effort but a stimulus move, as I noted previously.
But since KWA wasn't going to be ready in time, government officials decided to reopen a local mothballed plant that drew water from the polluted Flint River. That's what caused the poisoning. Authorities certainly thought that ditching Detroit would save them money. But given that KWA was going to cost $800 million more over 30 years, it is really hard to argue that the interim arrangement was driven by austerity concerns.
However, liberals have a story and they are sticking to it, facts be damned, as my colleague Robby Soave noted. So if they can't pin the debacle on private companies, then "private sector ideology" will do just fine. Thank you, very much!
Among the first to identify this ideology as the real culprit was Washington Post's Dana Milbank. And now The Nation's Michelle Chen in a piece entitled "Water Privatizers Have Their Eye on Flint's Lead Crisis" rails: "The cruel calculation of risking public health to choose 'cheaper' source of water is less a product of bureaucratic incompetence than that of a corporate mindset that monetizes human welfare."
If only! Indeed, had Flint "monetized human welfare," it wouldn't be in so much trouble.
Let's review the facts: Flint has been under a state-appointed emergency manager since 2011 because it failed to "balance its books"—a euphemistic way of saying that it was spending its citizens blind. Why? There are many reasons, but one is that the city's public unions for decades extracted lavish benefits for their employees while saddling taxpayers with the costs. Indeed, Flint's unfunded pension liabilities right now exceed $1 billion—about 20 times the city's $51 million annual budget. What's more, Flint charged its water customers—indeed, still does—on average $140 monthly, far more than many other cities in the county and elsewhere.
Now consider what would have happened if one of Chen's imaginary rapacious profiteer had been in control in Flint and had run up the company credit card to overpay its employees and then overcharged company customers to pay its credit card. Shareholders would have pulled out, regulators would have been on its ass, customers would have gone elsewhere, and the company would have collapsed.
What happened to Flint? It simply became ripe for a state takeover, which didn't mean substituting competent managers for incompetent managers as might have happened with a private company. No. It meant having it run by two sets of incompetent managers.
Although, technically the tragic decision to switch the city to the local Flint River plant rather than have it stick with Detroit happened on the state emergency manager's watch, there is reason to believe that the emergency manager was doing the local politicos' bidding (not the least because the Detroit emergency manager was accused of being too much of a hardass and insufficiently cooperative with Mayor David Bing or the city council). This is not in any way meant to absolve Gov. Rick Snyder or Flint's emergency managers of blame. Hey, they had a hand in breaking Flint, so they own it. That means state taxpayers should be on the hook for fixing the mess, and Gov. Snyder—and his Republican cronies—ought to pay the political price for it.
But of course Gov. Snyder, after saying that the "buck stops with him," is trying to hit up federal taxpayers for a buck—or a few million. So far President Obama has only put funny money in his tin cup. May be Obama will eventually be shamed into throwing in some real cash, but it's inconceivable it'll come anywhere close to fully compensating Flint's 100,000 or so residents, who are effectively imprisoned in a town where there are no jobs in homes they can't sell—at least not without swallowing a huge loss given the renewed hit to their already cratering property values.
As if that's not bad enough, unlike a private company, they can't sue the government for full damages because of the doctrine of sovereign immunity. This is not disaster capitalism, as Chen rails, it is disaster socialism.
And the problem with disaster socialism (is there any other kind, btw?) is not just that you eventually run out of other people's money, as Margaret Thatcher famously said, you also run out of the next level of government to kick the can to. If Chen has a plan to convince the United Nations to stick poor Third Worlders with the bill of rescuing relatively better off Flint residents, she should share pronto.
In truth, privatizing Flint's water system was always even less on the cards than a UN rescue plan. Indeed, efforts to privatize even DWSD, Flint's old supplier, run up against the intractable problem that private companies would have a hard time getting permission to charge the rates necessary from the city's ever-shrinking population base to pay off the system's existing debt while investing in future infrastructure upgrades. And these cities are hardly alone. So much as "privateers" like me and Adrian Moore would like to privatize water utilities to establish some modicum of consumer accountability, the reality is that the government has mucked things up too much for that to be an attractive option everywhere. Hence, Chen can relax a little.
So what should be done? IMHO, if liberals were truly interested in helping Flint residents rather than simply sacrificing them to the altar of the God of Beneficent Government, they should approach private philanthropists for donations to buy out the houses of Flint's residents and let them flee to better climes where jobs are more plentiful and the government less intrusive. (Houston, anyone?) Giving each Flint resident $10,000—or $40,000 to a family of four—will require about $4 billion, which is hardly beyond the means of the wealthy trinity of Bill Gates, Warren Buffet, and Mark Zuckerberg. And surely there are others whose help liberals will allow Flint victims to accept!
And what about the city of Flint? Indeed, if liberals were really as caring as they claim to be, they would shift their focus from saving geographical areas to saving living, breathing human beings.
But if they really, really want to do something about it, they should hand it to private developers to turn it into a giant landfill to bury liberal good intentions. The sheer volume that folks like Chen keep generating will guarantee good profits.