Tuesday, May 06, 2014

Tuesday Morning Links

This and that for your Tuesday reading.

- Polly Toynbee writes about the continued spread of privatization based solely on corporatist dogma even in the face of obvious examples of its harm to the public:
In the Royal Mail debacle, shares sold at £1.7bn rose to £2.7bn. The 16 investors chosen as "long-term" custodians included the most wolfish hedge funds, who sold the shares at once. Let's hope that ends any pretence that shareholders look after companies. What's more, the investment arm of Lazards, key adviser to Vince Cable, was also given "priority" status. But Lazard Asset Management sold its entire stake within a week at a profit of £8m. Likewise Goldman Sachs, employed to facilitate the sale, told its investors share prices would hit 610p a month after advising the government to float at 330p. How well these companies deserved their tongue-lashing from Margaret Hodge: "You all know each other. You work together. You trade with each other. You are part of this little clique and we the ordinary taxpayer lose out on it." This is a case of caveat vendor.

We should beware the inherent asymmetry when the state sells contracts and assets. On the government side, this is negotiating with a political gun at the head, conducted by inexperienced civil servants told to secure complex objectives, unable to walk away from already announced sell-offs. On the market side is rat-like native cunning impelled by profit, willingness to give mendacious assurances with one easy objective – to make money. Governments will always need to deal with markets for procurement and regulation – but that needs a strong, experienced civil service with equal cunning, not one cut by 30%, losing memory of past errors.
There is no evidence about how well contracting and privatising work: the best experts can find is 1980s assessments of early contracts for simple local services. At the very least, there should always be a state comparator. NHS contracting is galloping ahead, with no centrally gathered monitoring for comparison. Other privatisations rush on – probation and the court fines collection service – while companies built by cashing in from the state, such as G4S, A4E and Serco, are in disgrace. While Serco is being investigated by the Serious Fraud Office after overcharging on tagging, it emerges that its finance director sold £2.7m shares two months before the share price tanked on a profits warning.

This is the world David Cameron assumes always does better than public service, as a matter of unproven conviction. Laying out his Open Public Services policy, he said everything was up for sale, with "a new presumption" that "public services should be open to a range of providers competing to offer a better service". When he said: "The old narrow, closed state monopoly is dead," he forgot to say that services sold or contracted would become private monopolies making handsome profits at our expense. The dogma driving these privatisations wilfully ignores past experience.
- David Dayen contrasts the IRS' public message about cracking down on tax cheats against its actions in giving tax evaders two more years to keep free-riding.

- Amber Hildebrandt discusses how Canadian employers became addicted to temporary foreign workers - though as Tim Harper notes, the Cons' consistent pushing of cheap labour at the expense of Canadian youth has played a major role. And Mike Moffatt wonders why there's been an explosion of temporary foreign workers in southwestern Ontario (among other regions with plenty of available workers).

- Diana Ziomislic reports on the manifestation of inequality through differences in Ontario children's dental health - while pointing out that a universal dental care system would represent an obvious means of closing that particular health gap.

- Finally, Andrew Coyne muses about Stephen Harper's degeneration and lack of impulse control - visible most recently in his choice to gratuitously pick a fight with Chief Justice of Canada Beverley McLachlin. But Lawrence Martin observes that there's nothing new either in Harper focusing maniacally on his enemies list, and including public servants on that list for absolutely no justifiable reason:
(T)hese Conservatives constitute what might be called Ottawa’s first real wedge government. Other governments, including Tory ones, have sought to be more representative. With this one, it’s divide and conquer. It’s less about broadening the tent than hardening the attitudes of those within. Others are seen as enemies at the gate.

But the antagonism is fuelled by more than strategic political imperatives. I recall interviewing David Emerson, who had a unique perspective because he served in both the cabinets of Paul Martin and Stephen Harper. There were things he preferred about the Harper operation. But one difference that alarmed Mr. Emerson was the degree of visceral contempt he saw from Mr. Harper and his top lieutenants toward those opposed to their beliefs. He’d never seen anything like it. How could they harbour, he wondered, so much venom?

The combination – a wedge government driven by such a degree of animosity – makes for a potent mix. It’s why the enemies list has kept growing. It’s why a woman as honourable as the Chief Justice of our Supreme Court is now on it.

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