Political Animal


December 28, 2012 11:53 AM Public-Private Cooperation (Wink! Wink!)

By Ed Kilgore

From Stateline’s Josh Goodman comes one of the least surprising ledes of the year:

Several states, most of them led by Republican governors, have experimented in recent years with the idea of turning their economic development agencies over to semi-private management. The results have not been uniformly successful. Many of these organizations are struggling to balance job creation with public accountability.

Goodman goes on to report serious problems for the Wisconsin Economic Development Corporation, a Scott Walker policy love child that made loans to businesses with little if any oversight or accountability, leading to the recent resignation of WEDC’s chief financial officer. And Wisconsin’s not alone:

Similar semi-private agencies in other states have had their share of controversies. Both the Arizona Commerce Authority and JobsOhio have been lighting rods for criticism, with opponents arguing that they haven’t been transparent enough about which companies receive financial aid and how they are selected. JobsOhio’s future is also clouded by litigation challenging the organization’s constitutionality and the legality of its planned primary funding source, the lease of state liquor stores.
Meanwhile, the Indianapolis television station WTHR reported this week that Indiana State Senator Mike Delph introduced legislation requiring the partially privatized Indiana Economic Development Corporation to report how many of the jobs companies promise under its deals end up being created. Those numbers are currently kept private. “The bottom line is people have a right to know how their tax dollars are being spent,” Delph said.

Yep, that is the bottom line. Trouble is, Republicans who view the public sector as a bunch of illegitimate ripoff artists and worship private sector “job creators” tend to view “public-private partnerships” as sort of a repatriation program for “looted” money. Accountability to the public for use of public funds, whether we’re talking about business loans or school vouchers, is for them the lowest possible priority when it ought to be Job One.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.


  • Celui on December 28, 2012 12:19 PM:

    Wait a minute! An elected official who has already enacted measures to strip public employee bargaining (done, I'm sure in the light of day), who has already single-handedly set the stage to disassemble the union membership of so many Wisconsin industries and professional organizations, who has--apparently--forgotten he was elected, not appointed, and is therefore beholden to the voters of the state. Now it is evident that his 'public-private' economic development corporation has 'little oversight' with regard to public tax dollars to be spent for the benefit of 'the public.' This isn't democratic, representative government, it's government by the privileged few, an autocracy festering in the back rooms and shady places of the state house. What more will it take???

  • c u n d gulag on December 28, 2012 12:30 PM:

    Privatization of everything, will be the death of this country.
    It's the way politicians steer public tax money, unaccountably, to their pals in business, and either get some payback (aka: bribes) right away, or a place in the company later, if they lose an election, or get bored with politics, and want to make some real money.

    I'm not sure how "exceptional" future historians will judge our dying American Empire to have been, but I think it's safe to say, that they'll judge that The Roman Empire lasted longer, and was smarter - while the Roman people sure loved their 'circuses' too, the Roman government was smart enough to make sure that they had some 'bread' to go with them.

    And I won-t go into a long list, but the Roman Empire fell for many of the same reasons we seem to be heading in that direction:
    -Too many foreign entanglements.
    -The rich didn't want to pay taxes.
    -The endless drive to privatize what were once governmental responsibilities.

    In the words of that great Baseball philosopher, Casey Stengel, "The Ol' Professor" - "You could look it up!"

  • Josef K on December 28, 2012 12:32 PM:

    Grant them (the accountability-resisting officials involved) this at least: they know which side of the bread their butter is. That they're engaging in what amounts to graft and corruption doesn't seem all that material when you consider their preferred sector benefit, does it?

  • Mimikatz on December 28, 2012 12:58 PM:

    Selling to the average American consumer is becoming a dead end business model because of falling incomes in the bottom 80%. Consumer finance is especially difficult with increased regulation. Even defense is growing more slowly. So business is eying various new honeypots, including g education funding (the explosion of new Ed products startups and for-profit schools and colleges) and economic development funds. Expect more of this, but contrary to popular mythology, the private sector is not more efficient because of it's barbell wage structure and greed in skimming off profit. These partnerships and enterprises are for the most part guaranteed to fail.

  • Eeyore on December 28, 2012 1:22 PM:

    Now wait a minute.... Didn't Mittens and Paul "Eddie Munster" Ryan go all snippy about "Government picking winners and losers" during the campaign when talking about Federal investments in clean energy? Isn't this the same thing?

  • schtick on December 28, 2012 1:26 PM:

    It all goes back to whatever the teapubs accuse the dems of doing, you know the teapubs are doing it. They scream there is no transparency or accountability with the dems you can bet the farm it's the teapubs that are lacking everything.

    Privatitize everything? I think of the felon Scott from Florida. Sign legislation for drug testing and then have your family do the testing. Nice scam. Accuse the government of not being able to do anything, when YOU are the government, get the sheep to believe you, and then rip the government off with your friends with no transparency or accountability just like you accused the government of doing.

  • Rick B on December 28, 2012 1:57 PM:

    Ed, you are right that the conservatives consider the public sector as illegitimate use of money that would be better spent according to Adam Smith by self-serving individuals. It's all about simplifying tasks to the point where they can be handled by a single individual(usually leader of a small group), getting the tasks done in a short time with easily measurable results, and then rewarding the single individual (a clearly identified "hero" in effect) greatly to motivate them.

    It's highly simplistic and extremely authoritarian. It's a point of view that rejects cognitive complexity as being too slow and ineffective. An election is a coup by such a "hero" individual, not an appointment of a representative from the voters. "Public accountability" is just a way to allow the "Hero's" enemies to thwart him and rob him of his just reward. All the "accountability" that is required is to determine who collected the profits as private property at the end of the game.

    People who see themselves in that mythical "hero" mold cannot believe that any group can actually accomplish anything without an identifiable "hero" being responsible, so if a group does accomplish something, some individual "hero" caused it and was stiffed of his reward. This is usually accompanied with the strong belief that when the leader makes a decision there is no alternative possibility that could work. Again, it's very authoritarian.

    There is no room in this model for democracy, extensive consultation with others as part of the decision process ("intuition" is highly regarded), or group decision-processes. Highly complex problems simply are impossible to deal with. It's impossible with the "hero" model to alleviate poverty or provide universal and effective health care, for example.

    Conservatives want to simplify society down to where they are the dominant class and gather all the reward for what everyone is doing, because they can't do it without a "hero" leader who is an all-wise superman. To them the complexity of collaboration is a joke. Complex problems are left to be handled by the supreme leader of the world. Mere humans need not bother, that's what god does.

    Complexity is their enemy. Everything must be simplified down to action. Anything that is too complicated for them to understand is automatically simply wrong.

  • boatboy_srq on December 28, 2012 3:00 PM:

    @Eeyore: that was because the "loser" in this case (or maybe it was the "winner" - getting all that tax money and all just to go bankrupt - and Multiple Position Mitt was somehow oddly jealous) wasn't one of their friends. Had Solyndra been GE or Honeywell, and lost money on an internal publicly-funded project, you can bet the GOTea wouldn't have said a single word.