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July 30, 2007

Public V. Private

I meant to link to this Harold Meyerson column on the lax accountability measures applied to government contractors when it came out, but I didn't. So I'll do it now. The most telling bit comes at the end, when Harold points to legislation from Rep. Carolyn Maloney, who wants to "create a central database that would enable officials at one department to know when a contractor has screwed up at another." What's remarkable about her bill isn't its existence, but the fact that, currently, one department doesn't know when contractors for another have screwed up.

Despite being "a man with an apparent soft spot for command-and-control economics," I've got some appreciation for the efficiencies of the market, and its superiority in most pursuits. But using "the market" and simply outsourcing public services to private contractors are not the same thing. Markets require the fulfillment of a fair number of preconditions to work effectively. Among those conditions are competition between providers and accountability for participants.

But the way Republicans often sate the market, by simply giving a public contract to some private corporation while allowing minimal competition and totally abdicating any responsibility to conduct oversight, simply combines the worst of the public sector with the worst of the private sector. And so you get situations like the one Harold recounts, where the contractor hired to protect the Department of Homeland Security finds an envelope filled with white powder and tells the employee to "[take] the envelope outside and...go wash off the powder, which she did, passing directly in front of Chertoff's office on her way to the ladies' room." Brilliant! And yet that contractor kept their position for another year, and no other departments that used their services were alerted to the massive incompetence of the corporation, at least not until the recent hearings led by the Democrats.

July 30, 2007 | Permalink


Hold on a sec. Are government workers accountable? I have yet to see any evidence that government workers are any more accountable than government contractors.

Posted by: Adam Herman | Jul 30, 2007 10:55:50 AM

Government workers aren't competing for contracts, though.

Posted by: ajay | Jul 30, 2007 12:18:33 PM


Nice try at a red herring.

Posted by: Stephen | Jul 30, 2007 12:23:38 PM

The republicans blocked rules that would prevent contractors convicted of crimes (or what it just civil fraud?) from getting more government contracts, and you wonder about why there's no database of contractors who screw up?

This is also a problem in the private sector, where libel laws can make it difficult to establish databases of complaints against contractors, unless you're talking about unfounded complaints about individuals and their credit behavior...

Posted by: paul | Jul 30, 2007 12:30:37 PM

"the lax accountability measures applied to government contractors"

In my past I've had a couple of jobs where I've done a lot of government contracting work. Your notion that the government's accountability measures are "lax" is pretty funny. Weird, a pain in the butt, indecipherable, form-driven, measuring the wrong thing, inefficient, CYAish, sure, but "lax"? Not even close.

Posted by: ostap | Jul 30, 2007 12:52:10 PM

ostap : "Weird, a pain in the butt, indecipherable, form-driven, measuring the wrong thing, inefficient, CYAish, sure, but "lax"?"

Well, "measuring the wrong thing, inefficient and CYAish" can all contribute to something being "lax" in practice, even if it is draconian on paper.

In particular, those aspects tend to create a system that is easily gamed, giving an advantage to large corporations who regularly do government work, helping insulate them from potential competitors.

Posted by: Meh | Jul 30, 2007 2:08:54 PM

Real markets always have rules. That's why they grow and become strong, and the fact that having rules works is the reason business is done in a market instead of outside of the market.

Of course, the exception that proves the rule would be the transactions people want to keep secret, usually because long experience has convinced us that there oughta be a law.

Unsurprisingly, the most secretive administration in our history has already thrown so much money at the problem, so ineffectively, that we'll really need someone like Harry Truman, with a dozen Congressional committees to act as his posse, to ever restore the financial integrity of our government.

They said SS was going broke, but what they meant was that they were going to break it. Not quite 'mission accomplished', but pretty close.

Posted by: serial catowner | Jul 30, 2007 7:44:06 PM

why is it a red herring? our taxpayer dollars pay government workers the same as they do government contractors.

in fact, one reason there is so little oversight of contractors is because there is a culture of unaccountability among government workers in general. they are just as lax at policing contractors as they are internal operations.

Posted by: adam herman | Jul 31, 2007 3:48:48 PM

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