December 28, 2021

By Thom Hartmann

It happened fifty-six years before Ben Franklin walked out of Independence Hall in Philadelphia and told Elizabeth Willing Powel, the wife of Philadelphia’s mayor and one of the most influential women in the nation, that they had just created “a republic, if you can keep it.”  

On July 1, 1731, Franklin and his twelve Junto Club associates incorporated the nation’s first public library.  At the time, most books were imported and extraordinarily expensive, but Franklin and his associates believed the effort would pay off for the nation.

“[T]hese Libraries have improved the general Conversation of Americans,” he wrote in his autobiography, “made the common Tradesmen and Farmers as intelligent as most Gentlemen from other Countries, and perhaps have contributed in some Degree to the Stand so generally made throughout the Colonies in Defence of their Priviledges.”

Public libraries caught on and spread across the nation; literacy and thoughtful political debate followed them. 

And now neoliberal parasites are trying to turn these public goods into profit centers for Wall Street through privatization.

Librarian and author Caleb Nichols is writing over at Truthout.org about “a for-profit, private company that has been quietly infiltrating public libraries since 1997…”

This is the latest alarming part of a larger trend.  By 2006, the Economic Policy Institute noted, “43% of all employees who do the government’s work are actually employed by private businesses.”  Today that number is almost certainly well over 50%.

This privatization binge started in America during the Reagan administration, when Republicans embraced neoliberalism instead of classical economics and committed to turning all government functions over to their wealthy private-sector donors.

Ridiculing and slandering those who devote their lives to the service of their country, Reagan cynically proclaimed, “The best minds are not in government. If any were, business would steal them away.” 

But privatization is one of the biggest cons ever perpetrated on the American people, run not by “the best minds” but by the greediest.  

Their sales pitch is that if government will use its extraordinary and singular power to tax people, and then hand that money over to private corporations, those corporations will serve the public better and cheaper than the government could do. 

The main way companies that prey on tax dollars do this is by paying their workers crap wages after they’ve voided union contracts, slashed benefits, and ended pensions. 

The result is devastating to communities, while the services — something we see vividly with all the scandals around privatized prisons, power companies and schools — are substandard and no longer accountable to public scrutiny.

When local services are privatized and wages slashed, the good pay that used to recirculate in the community now goes as profits to a distant city where the privatizing corporation is headquartered, or even overseas into tax shelters for the privatizing company and its senior executives.

Because public sector government jobs often define the “good job floor” for local wages and benefits, other local employers will follow suit and cut wages and benefits, further devastating local economies.  Following widespread privatization, poverty creeps across communities like a slow-spreading but relentless fungus.

Many of these privatized workers now qualify for public benefits like food stamps and Medicaid as well as local forms of assistance, subsidizing the corporation while draining even more resources from the community/government.  As In The Public Interest notes:

“A 2009 study on the effects of outsourcing on food service workers in K-12 public schools in New Jersey found that companies such as Aramark, Sodexo, and Compass cut workers’ wages by $4-6 per hour following privatization. Many workers completely lost their health insurance benefits. [Now] food service contractors have the highest level of employees and their children enrolled in New Jersey FamilyCare, the state’s Medicaid program.”

With impoverished workers now spending less money in the local economy, small businesses struggle to survive and are more easily pushed out by giant concerns that promise jobs but demand millions in tax breaks and abatements, a process called “Wal-Martization.”

That, in turn, cuts tax revenues that support local government entities, particularly schools, libraries, police, and fire, making them even more reliant on their corporate predator “partners” who will eventually say, “You can’t afford the payments any longer, so just give us the whole thing.”

These firms also hide behind the veil of “trade secrets” and the 4th Amendment “right of privacy” (corporations are people, too, according to 5 conservatives on the Supreme Court) to keep reporters and citizens from knowing what they’re doing to screw these communities out of their tax dollars.

Not only is the public blocked from knowing what their governments are agreeing to as public functions are privatized, government itself (outside of those signing the initial contracts before moving onto well-paid jobs in the private sector) is often forbidden to know the details.

As Morgan Smith noted in a New York Times article titled When Private Firms Run Schools, Financial Secrecy Is Allowed:

“On a recently approved Texas charter school application, blacked-out paragraphs appear on almost 100 of its 393 pages.”

When newspapers sue under the Freedom of Information Act, which is supposed to keep government activities transparent to the taxpayers who fund them, they’re simply turned away, as the Times noted:

“When The Texas Tribune made an open-records request for employee salary records and marketing expenses at the state’s [privatized] full-time virtual schools, it received responses from all but one of those connected with for-profit entities indicating either that the records were not available or were not subject to public information laws.”

Even worse, government agencies that do have oversight powers usually don’t have the additional personnel required to provide oversight and regulation of these private companies in those few cases where they’re not blocked by confidentiality contracts.

Thus, billions are routinely stolen by the companies, and governments only discover it (if at all) long after the CEOs have stashed the money in their offshore tax havens.

As Rutgers researcher Patrice M. Mareschal found:

“Our review of contractor oversight in New Jersey shows that the state is failing in its duty of protecting vulnerable citizens from poor service and taxpayers from wasted funds. At the core of the problem is a complete lack of priority given to oversight despite a preference for contracted service provision. This is best exemplified by the massive shortage in qualified staff to manage contracts.”

Not only that, private corporations can get away with behaviors that are imprisonable crimes when committed by government employees. These “now legal” breaches of the public trust include self-dealing, handing off cash to family members, paying off politicians, and harassing or firing whistleblowers. 

As In the Public Interest notes:

“[P]rivate providers are generally not subject to conflict‐of‐interest laws, nepotism statutes or ordinances, ethics codes or whistleblower protection for their employees, or restrictions on political involvement. This last omission makes it possible to use political influence to get contracts and to increase public demand for their services. A prime example of this has been the large corporations that build, own, or manage prisons.”

Those private prison companies, of course, lobby politicians for harsher laws and longer jail terms for offenders, even working against efforts to decriminalize marijuana, all to increase their incarcerated populations and thus their profits. 

The goal here is too convert as much public tax money to private profit as possible, and they use a lot of fancy language and slick formulas to make it happen.

For example, Senators Rob Portman and Joe Manchin recently slipped a little-known “value for money” stipulation into the $1.2 trillion “Bipartisan Infrastructure” bill that passed last month, essentially turning almost every dollar in it over to private-sector corporations as “public-private partnerships.” Screwing the public like this is what got them enough Republican votes for the bill to pass the Senate.

“Public-private partnerships are valuable ways for states and localities to complete projects through financially sound solutions,” Manchin bragged in a press release. “Our bipartisan legislation will require states and communities to consider public-private partnerships when reviewing transportation project financing to ensure that we are making the best use of taxpayer dollars.” [emphasis added]

It doesn’t even make sense.  If a government agency can do something for, say, $100 million, how could a private corporation do it for less when they have to skim 30% or $30 million off the top for their own profits, shareholder dividends, and absurd CEO and senior executive pay?

At the same time Reagan was pitching privatization of public services, he was also pushing the idea that Americans were “rugged individualists” who should take care of their own families and communities.  

But how do you take care of your own community when it’s turned its tax dollars and functions over to a private corporation owned by a hedge fund on Wall Street whose executives stash their money in foreign tax shelters?

Ben Franklin isn’t the only Founder who must be rolling in his grave (Jefferson, for example, created the University of Virginia as a “free forever” college), and the legacy of Franklin’s libraries aren’t the only loss to our society as corporations eat our public sectors alive. 

It’s hard to find a single aspect of government, from federal to state to local, that hasn’t been touched by this cancer.

Unemployment and “food stamp” programs now run with fee-based cards from Wall Street banks, toll roads and parking meters are owned by foreign corporations, even our military and intelligence agencies are deeply infected with this curse (Edward Snowden, who spilled the NSA’s secrets, worked for a private corporate defense contractor).

The Reason Foundation, an outgrowth of the Koch brothers’ efforts, points out proudly how huge this process has become, even arguing for privatizing Fire Departments across the nation. (Franklin also started Philadelphia’s first fire department.)  

The 40-year experiment with the neoliberal/Republican/corporate takeover of government functions at all levels has impoverished communities across America while filling the money bins of politically connected and morbidly rich CEOs of these “public-private partnership” scams.

Now it’s threatening to turn Ben Franklin’s public libraries into corporate profit centers. It’s time for Americans to truly take our country back.

The website of origin for this commentary is HartmannReport.Com.

Thom Hartmann is a talk-show host and the author of The Hidden History of the War on Voting and more than 30 other books in print. His most recent project is a science podcast called The Science Revolution.

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