Government

EYE ON THE PIE: A private eye looks at privatization

December 18, 2006

I was sitting with my back to the door, watching the deer consume urban gardens, when she entered.

"Mr. Marcus?" she asked, in a voice that suggested the lower range of a clarinet.

"Yes," I replied, swiveling in my swivel chair.

"You don't know me," she said. "My name is Arlene Amour."

"I can understand that," I said, examining her with my eyes as would an eagle swirling over his prey. I liked what I saw.

"I want you to write about Gov. Mitch Daniels' plan to privatize state government," she pleaded. "He's going to ruin the state."

"Have a seat. I think you're straining your restraints," I growled softly. "I don't happen to agree with you about privatization. Except for a few government services (police, the judicial system and legislative functions), privatization can make lots of sense. Even the governor's office could be privatized, if it were done properly."

A tear started to form in her eye. She dabbed at it with a delicate hankie. "I had so hoped you would blast Daniels for his privatization efforts. You're known as a critic of most everything."

"What do we want?" I began. "We want a government that offers the highest quality of services for the lowest cost possible. Right?"

"Right," Arlene sniveled.

"Then why do we care whether a private company or a public agency delivers the service? The question is, 'Does the same highquality job get done at the lowest possible cost?' That calculation must include the cost of inconvenience to customers/citizens.

"The Daniels administration has taken some important steps toward figuring out what state agencies should do. You'll find a report right on the governor's Web site that spells out performance standards and achievements in 2005 for three dozen agencies.

"You and I can argue easily that they are not measuring the right things, that their metrics are a mess. We certainly can contest the sycophantic writing style."

"That's what I mean," she interrupted. "They are sick, almost psychotic in wanting to tear down government."

"No," I insisted, "the report flatters the governor and reads like a campaign document rather than an objective study. Nonetheless, this process and the resulting document are necessary first steps to improve government services. We cannot run government (with public or private employees) unless we have a clear understanding of what they are expected to do.

"Once we can make that known, clearly and publicly, we can move on to asking, 'Who can do the best job at what cost?' It might be a private company, a government agency or a not-for-profit corporation. All must be given an opportunity to compete for the task.

"If I have a disagreement with the Daniels administration, it is that his officials are drawing up contracts that extend over too long a time. Yes, we want stability in services. Yes, it takes a while to get up to speed and that should be an advantage for existing government agencies. But the state must be able to change performance standards and get out of contracts easily. If we have long contracts, it might not cover changing circumstances and could allow succeeding governors to say, 'Hey, not my fault. It was the other guy'."

"I'm disappointed," Arlene pouted. "I was depending on your reputation as a contrarian."

"Listen," I said, "let's go to Miles Archer's Bar and I'll tell you all about me and you can tell me all about you."

"No. I've a reputation to preserve," Arlene said as firmly as she closed the door. I went back to studying the deer.



Marcus taught economics more than 30 years at Indiana University and is the former director of IU's Business Research Center. His column appears weekly. To comment on this column, send e-mail to mortonjmarcus@yahoo.com.
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