Monday, June 02, 2003

Contestants in competition: Private sector more efficient than government

By Darren Weeks

It seems that, once again, that the solution to our problems is not government intervention.

From the Washington Post, Airports Favor Private Sector Screeners:

Just months after the federal government took over screening at security checkpoints, airports across the country are starting to show interest in returning to an airport security system handled by the private sector.

With Memorial Day kicking off what the airline industry hopes will be a small but noticeable uptick in passenger travel, airports are worried that the Transportation Security Administration's planned workforce reduction this summer will result in long security lines. Adding to the concern over potentially slow checkpoints is that the agency recently told airports it could not meet its goal of getting passengers through security in 10 minutes.


I knew this would happen, when the government took over airport screening. Security would be lapse where it needed to be tight, and it would be so unnecessarily strict in places it didn't need to be, that it would create crisis situations for travelers.

Anytime you put the performance of the private sector against the performance of a government agency, there will be no contest who will be more effective.

A private sector business with a government contract to perform a service, stands to lose huge profits if their services don't prove to be effective and fruitful. The government will audit what they are spending, review the effectiveness of the company's provisions, and cancel the contract, if needed. The company will be replaced by the next winning bidder. Performance will improve, and the standards will not only be met, but often exceeded. Therefore, if the private sector fails to perform, it will be punished. Hence, there is incentive for the private sector business to do a good job.

A government agency, however, when it fails to perform the needed task(s), will blame it on a lack of funding and demand more money. When more money is approved for the necessary responsibility, the agency charged with the task will then hire more unionized government workers who will be paid higher, and be even less effective than the first batch.

Eventually, the performance of the agency is again reviewed. This time, mismanagement and a lack of effective leadership will be fingered as the problem. A manager will be fired, but the real decision makers at the top will be retained.

Due to the addition of the excess personnel within the bureau, an appeal for more taxpayer funding will be made. After much debate and additional expenses, the appeal will be met with approval.

Also, since there are more people within the bureau, this has afforded them plenty of time to dream up new excuses for non-performance, and new reasons for expanding the budget of the agency. And, as sure as a goose walks barefoot in the barnyard, they will be ready for the next review.

Hence, with the private sector, the reward is for effective performance. With the public sector (a government bureau or agency), non-performance is routinely rewarded, and even encouraged.

Which brings me to an article from The Seattle Times:

About 850,000 government jobs will be opened to private companies under new rules yesterday that encourage competition to replace federal workers who perform tasks such as giving weather reports to private pilots, fixing computers and taking money and tickets at national parks ... The regulations issued yesterday "will open much wider the doors to those businesses and their workers who can seek to provide to the American taxpayer a better value at a better price," said Mitch Daniels, outgoing director of the Office of Management and Budget. ... Officials have identified examples of work being performed by government employees that they said probably could be done better and more cheaply by private businesses.


Do you think maybe someone is finally catching on?

Of course, it is George W. Bush that is making the change, so I wouldn't be surprised to find many of the companies that are awarded contracts to be his donors, or companies in which he holds substantial investment interests.

As I've said before, with regard to Bush's Insider Trading scams, it is only illegal if we do it.

But the fact remains that when you reward a certain behavior, you will get more of it. When you discourage a certain behavior, you will get less of it.

As Ronald Reagan said in 1964:

In this vote-harvesting time, they use terms like the "Great Society," or, as we were told a few days ago by the President, we must accept a "greater government activity in the affairs of the people." But...the full power of centralized government — this was the very thing the Founding Fathers sought to minimize. They knew that governments don't control things. A government can't control the economy without controlling people. And they knew when a government sets out to do that, it must use force and coercion to achieve its purpose. They also knew, those Founding Fathers, that outside of its legitimate functions, government does nothing as well or as economically as the private sector of the economy.


Less government means less waste. And much more common sense.