Corporatism isn't Capitalism

For-profit government doesn't work, as Frank Rich points out:

...Mr. Safavian, a former lobbyist, had a hand in federal spending, first as chief of staff of the General Services Administration and then as the White House's chief procurement officer, overseeing a kitty of some $300 billion (plus $62 billion designated for Katrina relief). He arrived to help enforce a Bush management initiative called "competitive sourcing." Simply put, this was a plan to outsource as much of government as possible by forcing federal agencies to compete with private contractors and their K Street lobbyists for huge and lucrative assignments. The initiative's objective, as the C.E.O. administration officially put it, was to deliver "high-quality services to our citizens at the lowest cost."

The result was low-quality services at high cost: the creation of a shadow government of private companies rife with both incompetence and corruption. Last week Representative Henry Waxman, the California Democrat who commissioned the first comprehensive study of Bush administration contracting, revealed that the federal procurement spending supervised for a time by Mr. Safavian had increased by $175 billion between 2000 and 2005. (Halliburton contracts alone, unsurprisingly, went up more than 600 percent.) Nearly 40 cents of every dollar in federal discretionary spending now goes to private companies.

In this favor-driven world of fat contracts awarded to the well-connected, Mr. Safavian was only an aspiring consigliere. He was not powerful enough or in government long enough to do much beyond petty reconnaissance for Mr. Abramoff and his lobbying clients. But the Bush brand of competitive sourcing, with its get-rich-quick schemes and do-little jobs for administration pals, spread like a cancer throughout the executive branch. It explains why tens of thousands of displaced victims of Katrina are still living in trailer shantytowns all these months later. It explains why New York City and Washington just lost 40 percent of their counterterrorism funds. It helps explain why American troops are more likely to be slaughtered than greeted with flowers more than three years after the American invasion of Iraq.

The Department of Homeland Security, in keeping with the Bush administration's original opposition to it, isn't really a government agency at all so much as an empty shell, a networking boot camp for future private contractors dreaming of big paydays. Thanks to an investigation by The Times's Eric Lipton, we know that some two-thirds of the top department executives, including Tom Ridge and his principal deputies, have cashed in on their often brief service by becoming executives, consultants or lobbyists for companies that have received billions of dollars in government contracts. Even John Ashcroft, the first former attorney general in American history known to immediately register as a lobbyist, is selling his Homeland Security connections to interested bidders. "When you got it, flaunt it!" as they say in "The Producers."

To see the impact of such revolving-door cronyism, just look at the Homeland Security process that mandated those cutbacks for New York and Washington. The official in charge, the assistant secretary for grants and training, is Tracy Henke, an Ashcroft apparatchik from the Justice Department who was best known for trying to politicize the findings of its Bureau of Justice Statistics. (So much so that the White House installed her in Homeland Security with a recess appointment, to shield her from protracted Senate scrutiny.) Under Henke math, it follows that St. Louis, in her home state (and Mr. Ashcroft's), has seen its counterterrorism allotment rise by more than 30 percent while that for the cities actually attacked on 9/11 fell. And guess what: the private contractor hired by Homeland Security to consult on Ms. Henke's handiwork, Booz Allen Hamilton, now just happens to employ Greg Rothwell, who was the department's procurement chief until December. Booz Allen recently nailed a $250 million Homeland Security contract for technology consulting.

The continuing Katrina calamity is another fruit of outsourced government. As Alan Wolfe details in "Why Conservatives Can't Govern" in the current Washington Monthly, the die was cast long before the storm hit: the Bush cronies installed at FEMA, first Joe Allbaugh and then Michael Brown, had privatized so many of the agency's programs that there was little government left to manage the disaster even if more competent managers than Brownie had been in charge.

But the most lethal impact of competitive sourcing, as measured in human cost, is playing out in Iraq. In the standard narrative of American failure in the war, the pivotal early error was Donald Rumsfeld's decision to ignore the advice of Gen. Eric Shinseki and others, who warned that several hundred thousand troops would be needed to secure the country once we inherited it. But equally reckless, we can now see, was the administration's lax privatization of the country's reconstruction, often with pet companies and campaign contributors and without safeguards or accountability to guarantee results.

Washington's promises to rebuild Iraq were worth no more than its promises to rebuild New Orleans. The government that has stranded a multitude of Americans in flimsy "housing" on the gulf, where they remain prey for any new natural attacks the hurricane season will bring, is of a philosophical and operational piece with the government that has let down the Iraqi people. Even after we've thrown away some $2 billion of a budgeted $4 billion on improving electricity, many Iraqis have only a few hours of power a day, less than they did under Saddam. At his Rose Garden press conference of June 14, the first American president with an M.B.A. claimed that yet another new set of "benchmarks" would somehow bring progress even after all his previous benchmarks had failed to impede three years of reconstruction catastrophes.

Of the favored companies put in charge of our supposed good works in Iraq, Halliburton is the most notorious. But it is hardly unique. As The Los Angeles Times reported in April, it is the Parsons Corporation that is responsible for the "wholesale failure in two of the most crucial areas of the Iraq reconstruction - health and safety - which were supposed to win Iraqi good will and reduce the threat to American soldiers."

Parsons finished only 20 of 150 planned Iraq health clinics, somehow spending $60 million of the budgeted $186 million for its own management and administration. It failed to build walls around 7 of the 17 security forts it constructed to supposedly stop the flow of terrorists across the Iran border. Last week, reported James Glanz of The New York Times, the Army Corps of Engineers ordered Parsons to abandon construction on a hopeless $99.1 million prison that was two years behind schedule. By the calculation of Representative Waxman, some $30 billion in American taxpayers' money has been squandered on these and other Iraq boondoggles botched by a government adhering to the principle of competitive sourcing...