President's View (Public Citizen News - January/February 2004)

Recent Events Demonstrate Failure of White House's Market-Based Solutions

Politics, at its core, is the art of balancing public and private interests. George W. Bush works for private economic interests. Deregulation and privatization are the linchpins of virtually every one of his policies, whether you’re talking about foreign trade, electric utilities, health care, the environment, social welfare, worker rights, pensions or food safety.

To hear Bush tell it, most of society’s problems can be solved by "market forces" and big bad, bumbling government should just get out of the way. Homeland security and market-distorting subsidies and tax breaks for corporate America are obviously big exceptions. I guess that’s his compassionate side.

As a practical matter, Bush’s pro-business policies just don’t work for the vast majority of Americans. Only when the failures reach a crisis stage or become so ridiculously obvious as to spark overwhelming public outcry does Bush reverse course. Nothing illustrates this better than the administration’s decision to toughen meat safety standards, although not nearly enough, after the recent discovery of mad cow disease in the U.S. cattle herd. This about-face came just weeks after the administration had joined with its allies in the meat industry to block an identical measure in Congress and after years of warnings from consumer advocates about the need for stricter safety regulation of meat. Similarly, the Food and Drug Administration in late December banned the dietary supplement ephedra – but only several years after it became obvious that otherwise healthy people were dying from its use.

Make no mistake, despite these "indiscretions," Bush is still the darling of the anti-regulation corporate jet set, and he has certainly experienced no epiphany about the balancing of public and private interests. In fact, through administrative actions, he has virtually gutted the Clean Air Act after raking in campaign contributions from the big polluters, including the utility and auto industries.

Bush is also a big believer in privatizing government functions – a way for him to pay off his rich friends and corporate patrons with taxpayer money. But after the war profiteers at Halliburton, Dick Cheney’s former company, were caught gouging the U.S. government on a contract to supply gasoline to Iraqis, the Pentagon quietly decided that the military could handle that function better – and more cheaply! – anyway. Then, earlier this month, The Washington Post reported that a Pentagon effort to turn over hundreds of thousands of military jobs to private contractors was shelved, at least temporarily, after Army Secretary Tom White was ousted last year. White was the former Enron executive who presided over the robbery of California electricity ratepayers several years ago. Perhaps the Pentagon’s experience with private contractors in Iraq didn’t meet the rosy scenarios painted by the privatizers. But still, most of the rebuilding in Iraq is being carried out by Bush-friendly U.S. contractors under limited or no-bid contracts.

If Bush had his way, Medicare would be privatized, too. Although the bill didn’t go as far as he wanted it to, Bush last year signed legislation that begins that process. It relies on private insurers, instead of the government, to deliver a drug benefit to seniors and sets up an experimental, but rigged, competition between insurers and the government. Bush also wants to privatize Social Security by allowing workers to invest their contributions in the stock market. This would be a gold mine for Bush’s rich Wall Street pals but could leave many retirees penniless after risky investments or market downturns such as occurred in 2001 and 2002. Let’s face it, most people are too busy making ends meet to ever learn enough to swim with the sharks in the financial industry. Will Bush’s faith-based charities take care of the hungry, homeless seniors? I doubt it.

Bush’s policies give great comfort to the very rich, but if they are carried through to fruition, they will begin to break down the bonds of civil society. Our democracy cannot continue to function if government, which represents the public interest, is subservient to business, the private interest, which is what is happening now. Neither, ultimately, can capitalism survive, and this is what corporate leaders and their friends in the White House and Congress don’t seem to understand. If they go too far, their greed will kill the economic golden goose – the middle class.

Most seniors understand that privatizing Medicare and Social Security are truly bad ideas, and that "markets" cannot solve our environmental problems, bring honesty to corporate accounting or provide prescription drugs to the elderly at reasonable prices. As more and more jobs disappear and are moved abroad under the WTO-NAFTA trade regime – which, again, emphasizes private profits over public values – Americans are learning that the rules governing our society make a big difference in the quality of their lives.

Joan Claybrook is president of Public Citizen.

Read previous columns by Joan Claybrook:

Push to Repeal Roosevelt-Era Energy Regulation Flies in the Face of History - November/December 2003

Power Rangers: Bush Campaign Raking In a Bundle From Corporate Fat Cats - September/October 2003

From Campaign 2000 to Why U.S. Invaded Iraq, Bush is a Contradiction - July/August 2003

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