NYTimes.com Article: Victors and Spoils (fwd)

If one aspect of the Bush strategy to keep the Republicans in power is
permanent war, the other is the creation of a spoils system within the
federal bureaucracy.

--

Victors and Spoils

November 19, 2002
By PAUL KRUGMAN






Rule No. 1: Always have a cover story. The ostensible
purpose of the Bush administration's plan to open up
850,000 federal jobs to private competition is to promote
efficiency. Competitive vigor, we're told, will end
bureaucratic sloth; costs will go down, and everyone -
except for a handful of overpaid union members - will be
better off.

And who knows? Here and there the reform may actually save
a few dollars. But I doubt that there's a single politician
or journalist in Washington who believes that privatizing
much of the federal government - a step that the
administration says it can take without any new legislation
- is really motivated by a desire to reduce costs.

After all, there's a lot of experience with privatization
by governments at all levels - state, federal, and local;
that record doesn't support extravagant claims about
improved efficiency. Sometimes there are significant cost
reductions, but all too often the promised savings turn out
to be a mirage. In particular, it's common for private
contractors to bid low to get the business, then push their
prices up once the government work force has been
disbanded. Projections of a 20 or 30 percent cost saving
across the board are silly - and one suspects that the
officials making those projections know that.

So what's this about?

First, it's about providing
political cover. In the face of budget deficits as far as
the eye can see, the administration - determined to expand,
not reconsider the program of tax cuts it initially
justified with projections of huge surpluses - must make a
show of cutting spending. Yet what can it cut? The great
bulk of public spending is either for essential services
like defense and the justice system, or for middle-class
entitlements like Social Security and Medicare that the
administration doesn't dare attack openly.

Privatizing federal jobs is a perfect answer to this
dilemma. It's not a real answer - the pay of those
threatened employees is only about 2 percent of the federal
budget, so efficiency gains from privatization, even if
they happen, will make almost no dent in overall spending.
For a few years, however, talk of privatization will give
the impression that the administration is doing something
about the deficit.

But distracting the public from the reality of deficits is,
we can be sure, just an incidental payoff. So, too, is the
fact that privatization is a way to break one of the last
remaining strongholds of union power. Karl Rove is after
much bigger game.

A few months ago Mr. Rove compared his boss to Andrew
Jackson. As some of us noted at the time, one of Jackson's
key legacies was the "spoils system," under which federal
jobs were reserved for political supporters. The federal
civil service, with its careful protection of workers from
political pressure, was created specifically to bring the
spoils system to an end; but now the administration has
found a way around those constraints.

We don't have to speculate about what will follow, because
Jeb Bush has already blazed the trail. Florida's governor
has been an aggressive privatizer, and as The Miami Herald
put it after a careful study of state records, "his bold
experiment has been a success - at least for him and the
Republican Party, records show. The policy has spawned a
network of contractors who have given him, other Republican
politicians and the Florida G.O.P. millions of dollars in
campaign donations."

What's interesting about this network of contractors isn't
just the way that big contributions are linked to big
contracts; it's the end of the traditional practice in
which businesses hedge their bets by giving to both
parties. The big winners in Mr. Bush's Florida are
companies that give little or nothing to Democrats.
Strange, isn't it? It's as if firms seeking business with
the state of Florida are subject to a loyalty test.

So am I saying that we are going back to the days of Boss
Tweed and Mark Hanna? Gosh, no - those guys were pikers.
One-party control of today's government offers
opportunities to reward friends and punish enemies that the
old machine politicians never dreamed of.

How far can the new spoils system be pushed? To what extent
will it be used to lock in a permanent political advantage
for the ruling party? Stay tuned; I'm sure we'll soon find
out.

http://www.nytimes.com/2002/11/19/opinion/19KRUG.html?ex=1038684434&ei=1&en=605c31a6003b910e



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