A couple of days ago I learned from a report on Marketplace that the federal government has the same number of employees today as it did in 1963. Despite hysterical claims from the right about the rise in big government, the thing that’s actually grown in the past five decades is government contracting: the use of private businesses to carry out the government’s work. Indeed, the federal government’s responsibilities have increased over time: in the past five years, the federal government's budget has tripled (after accounting for inflation). But rather than accomodating that increase through a comparable increase in government employees – subject to oversight, checks-and-balances, fair practice laws, and the like – we have contracted out some of the government’s most important business to companies whose legal fiduciary duty is to make a profit on that business. That is, they are legally required to maximize the difference between the money the government gives them and the money they actually spend on the project for which they’ve been contracted.
A good friend of my family’s, Elliott Sclar, wrote a book about this a few years back, You Don’t Always Get What You Pay For: The Economics of Privatization (Cornell, 2001). There’s been a lot of press about this issue as it relates to the wars in Iraq and Afghanistan, because the United States now has more private contractors employed in those countries than members of the armed forces. Just last week James Risen and Mark Mazzetti of the New York Times wrote about Blackwater’s 30+ shell companies that have won contracts from the U.S. government. Find this article. But we’ve ignored, for far too long, the outsourcing of our government’s responsibilities to private companies whose interests lie with shareholders rather than with all of us.
I’ve long thought that someone with a lot of money, say George Soros, should start a huge public relations campaign about the government services we benefit from, to remind people that government is not a bad thing. Something along the lines of, “Hey, do you like sidewalks? Do you like getting your trash picked up every week instead of having it piling up in the street? Do you enjoy streetlights? Guess who makes sure you have all those things? Gooooo government!” Obama seems to be taking on this theme recently, but I don’t think he can do it alone.